Millions of taxpayers are rushing to complete their federal and state filings before the April 18 deadline. Among them are several million people in this country illegally, and there are signs that fewer such immigrants are filing than in years past.
There is a common belief that immigrants in this country without authorization don’t file or pay taxes. But the IRS says that last year nearly 4.5 million people across the country who don’t have Social Security numbers filed federal tax returns and many are in this country illegally.
At the Unity Council, an East Oakland community-based organization offering free tax preparation for low-income people, about a dozen clients and IRS-certified volunteer tax preparers spent a recent afternoon hunched over rows of aging computers.
“We’ll help everyone,” says Clarissa Johnson, who directs the clinic. “We don’t ask them about their immigration status. That is between them and the tax preparer and that is confidential.”
Many of these people use Individual Taxpayer Identification Numbers, or ITINs. Many ITIN holders are foreign investors or students. But it’s generally understood that most tax filers using an ITIN are in this country illegally — like 36-year-old Axel, who asked that we not use his last name because of his immigration status. He came to the U.S. from Guatemala several years ago. In his native Spanish, he said he has no hesitation about filing his tax returns.
“First, because it’s my responsibility, I want to do things the correct way,” he says.
Axel says a few years ago a shady tax preparer made mistakes on his return and he wound up getting fined several thousand dollars.
“I don’t like to create problems for myself,” he says.
There is an obvious incentive to file: a chance to get a refund. Johnson says another reason is if a person winds up in immigration court, a record of having filed taxes is considered evidence of “good moral character.”
“And especially if they are working toward their citizenship, it’s something that can show that they’re here for the long haul. They’re here each year paying their taxes,” she says.
According to the Taxpayer Advocate Service, an office of the IRS, ITIN filers last year paid almost $24 billion in federal taxes.
Yet as the Trump administration cracks down on illegal immigration, there’s some anecdotal evidence that fewer immigrants using ITINs are choosing to file their taxes this year.
Max Moy-Borgen runs the tax program at the Mission Economic Development Agency in San Francisco. It’s one of the largest free tax preparation programs in the country.
“Many of our clients are telling us that in years past they felt more hope and more of ability to have a pathway toward citizenship and lately there’s a lot less hope,” Moy-Borgen says.
Overall, tax service providers in the San Francisco Bay Area say there’s about a 20 percent decline in the number of people filing with ITINs. There are similar reports from service providers in other areas of the country, according to Francine Lipman, who teaches tax law at the University of Nevada.
“Sending in a tax return with your current address and information is very unnerving to a population that wants to comply with the law and is actually leaving significant refunds on the table by not filing tax returns,” she says.
Still, the IRS is barred from sharing its information with other government agencies such as the Department of Homeland Security except under limited circumstances.
But Lipman says many ITIN filers have to decide whether to trust that firewall.