WASHINGTON (Boston Globe) -- The Bush administration insisted on a little-noticed change in the bipartisan Senate immigration bill that would enable 12 million undocumented residents to avoid paying back taxes or associated fines to the Internal Revenue Service, officials said. An independent analyst estimated the decision could cost the IRS tens of billions of dollars.
A provision requiring payment of back taxes had been in the initial version of a bill proposed by Senator Edward M. Kennedy, the Massachusetts Democrat. But the administration called for the provision to be removed due to concern that it would be too difficult to figure out which illegal immigrants owed back taxes.
The dropping of the back-tax provision was not made clear in the announcement of the immigration reform proposal on Thursday. Secretary of Homeland Security Michael Chertoff, speaking in reference to illegal immigrants seeking legal status, said, "You've got to pay your taxes." He did not state whether he was referring to back taxes, future taxes, or both. White House spokesman Scott Stanzel, asked in a telephone interview yesterday to clarify Chertoff's remark, said it referred only to future taxes. "It is important that the reformed immigration system is workable and cost efficient," Stanzel said. "Determining the past tax liability would have been very difficult and costly and extremely time consuming."
KANSAS CITY (AP) — Uncle Sam might be willing to give refunds to illegal immigrants who have paid more than their share of federal income taxes, but Missouri and Kansas aren't so generous. Tax officials in the two states insist that taxpayers provide accurate information on their returns in order to get a refund, if one is due. But often, workers who are in the country illegally use a false Social Security number, then provide additional tax information when filing a return.
For the feds, having an Individual Taxpayer Identification Number — created in 1996 to ensure every worker pays income taxes — attached to a return is enough even if there's a false Social Security number listed on the W-2 form. From 1996 to 2003, people who filed returns using an ITIN contributed $48 billion to the U.S. Treasury and received $23 billion in refunds. In 2005, the IRS received 1.6 million ITIN applications, the most since 1996. But Kansas and Missouri, though happy to receive the income taxes, won't provide a refund because they say they can't be sure from whom the money was withheld without a Social Security number.
A provision requiring payment of back taxes had been in the initial version of a bill proposed by Senator Edward M. Kennedy, the Massachusetts Democrat. But the administration called for the provision to be removed due to concern that it would be too difficult to figure out which illegal immigrants owed back taxes.
The dropping of the back-tax provision was not made clear in the announcement of the immigration reform proposal on Thursday. Secretary of Homeland Security Michael Chertoff, speaking in reference to illegal immigrants seeking legal status, said, "You've got to pay your taxes." He did not state whether he was referring to back taxes, future taxes, or both. White House spokesman Scott Stanzel, asked in a telephone interview yesterday to clarify Chertoff's remark, said it referred only to future taxes. "It is important that the reformed immigration system is workable and cost efficient," Stanzel said. "Determining the past tax liability would have been very difficult and costly and extremely time consuming."
KANSAS CITY (AP) — Uncle Sam might be willing to give refunds to illegal immigrants who have paid more than their share of federal income taxes, but Missouri and Kansas aren't so generous. Tax officials in the two states insist that taxpayers provide accurate information on their returns in order to get a refund, if one is due. But often, workers who are in the country illegally use a false Social Security number, then provide additional tax information when filing a return.
For the feds, having an Individual Taxpayer Identification Number — created in 1996 to ensure every worker pays income taxes — attached to a return is enough even if there's a false Social Security number listed on the W-2 form. From 1996 to 2003, people who filed returns using an ITIN contributed $48 billion to the U.S. Treasury and received $23 billion in refunds. In 2005, the IRS received 1.6 million ITIN applications, the most since 1996. But Kansas and Missouri, though happy to receive the income taxes, won't provide a refund because they say they can't be sure from whom the money was withheld without a Social Security number.
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