This from The South Florida Sun Sentinel (Ft Lauderdale), February 12, 2006 Undocumented workers must report income, by Allan Wernick
The law requires undocumented immigrants to report income to the Internal Revenue Service under the same rules that apply to other earners. If you want to file a tax return but don’t have a Social Security number, you can use an Individual Taxpayer Identification Number as a substitute. An ITIN is a nine-digit number used for tax purposes. You get the number by including IRS Form W-7 the first time you file a tax return.
Many undocumented immigrants want an ITIN for banking and other purposes. The IRS now issues ITINs to undocumented immigrants only if they file a tax return. Given this rule, workers who worked ‘off the books’ and didn’t file in the past might want to consider filing this year.
According to the IRS, to get an ITIN you must have a legal obligation to file a return. You have that obligation if you earned $400 or more as an independent contractor. Examples of an independent contractor are day laborers doing yard work for different homeowners each day and part-time housekeepers working, as needed, cleaning apartments.
Regular employees (as opposed to independent contractors) have an obligation to report income if they earned at least $8,200, though the amount might vary depending on age and other factors.
If you earned very little last year, you might be able to report your income without having to pay taxes. You could file a return, get an ITIN and not have to pay a cent to the government.
An ITIN alone does not authorize you to work in the United States. Still, some employers hire undocumented immigrants and report their workers’ income using the ITIN.
According to tax expert Eileen Glassman of the Newburgh, N.Y., accounting firm of Goldstein, Karlewicz and Goldstein, LLP, if you or your employer reported income using an ITIN number, then later you get a valid Social Security card, you can ask the U.S. Social Security Administration to reconcile (put together) any retirement accounts that you create.