ICE and the IRS have worked up a database sharing agreement. Several IRS officials have resigned due that agreement, which is an unprecedented authorization for the use of taxpayer data for purposes unrelated to paying taxes. Here is an analysis of the Memorandum of Understanding. Millions of unauthorized persons pay taxes and their personal information is in IRS records.
How ICE could use IRS data?
As the NY Times puts it, “ICE officials can ask the I.R.S. for information about people who have been ordered to leave the United States or whom they are otherwise investigating.” But the net that ICE can cast is much larger. There are about 12 million unauthorized persons in the U.S. and around 4.2 million or more persons protected from deportation either because they having asylum applications active (two million or because they are here due to humanitarian parole (1.3 million or Temporary Protected Status (900,000).
What personal (non tax) information does the IRS have about individual tax payers?
Date of birth, residence, wages, employer (if not self-employed), banks used. Of course, Social Security number. But many unauthorized persons use another person’s SS number. And many unauthorized persons use an IRS -issued Individual Taxpayer Identification Number (ITIN), which is issued only for paying taxes. An ITIN is used legally by international students, foreign investors and others. But most of the 5.6 million actively used ITINs are estimated to be used by unauthorized persons. (Here is description of ITINs vs SS numbers.)
Do humanitarian parole and TPS persons pay federal taxes?
Assuming 70% of these (high vs U.S. citizens) are employed, we can assume that pretty much 100% of them are employed in a way that results in paying taxes (payroll taxes and in income taxes). That comes to 1.5 million persons. ICE can trace through the IRS if they are still in the U.S. (due to tax submissions) and personal information about them. They can thereby, at the least, determine if they remain in the U.S. after they have been told to self-deport.
Do unauthorized persons pay federal taxes?
Yes, many do. In 2005, the Social Security Administration estimated that half of unauthorized persons pay taxes. Assuming 12 million unauthorized persons, an employment rate (high vs citizens) of 70% that comes to about six million unauthorized persons paying federal taxes and about 2.5 million working and not paying taxes – i.e. paid in cash.
How can unauthorized persons be found via the IRS?
Those paying taxes (estimated at six million) are using either some other person’s SS number or their own or some one else’s ITIN. This means that many and perhaps most unauthorized persons – but not all – cannot be easily found by ICE using these numbers.
How much tax payments are unauthorized persons paying?
The Budget Lab at Yale estimates that “in 2023, unauthorized immigrant workers paid $66 billion in federal taxes, with roughly $43 billion in payroll taxes and $22 billion in individual income taxes (see chart below; note that this does not include state and local tax payments). This pay federal taxes. The Congressional Budget Office (CBO) noted in a 2007 report that between 50-75% of unauthorized immigrants pay some combination of federal income and/or payroll taxes.”