The IRS created a nine-digit Individual Tax Identification Number in 1996 for foreigners who don’t have Social Security numbers but need to file taxes in the U.S. But it is increasingly used by undocumented workers to file taxes, apply for credit, get bank accounts or even buy a home.
The IRS issued 1.5 million ITINs in 2006 – a 30 percent increase from the previous year. To obtain one, a person needs to submit to the IRS an application and a document that serves as proof of identity, such as a visa or driver’s license. All told, the tax liability of ITIN filers between 1996 and 2003 was $50 billion. The agency has no way to track how many were immigrants, but it’s widely believed most people using ITINS are in the United States illegally.
To Ben Johnson, director of the Immigration Policy Center at the nonpartisan American Immigration Law Foundation, the widespread use of tax ID numbers is another sign that the immigration system is broken.
“The U.S. economy hangs a huge ‘help wanted’ sign at the border, and they come to work, not to hide,” he said. “A lot of people struggle with the idea they’re here without permission, and want to find a way to operate legitimately, like a normal hardworking person.”
Judging by the crowded waiting room at Esteban Ramirez’s modest tax preparation office in Richmond, where a television blared Spanish-language soap operas, it’s clear undocumented immigrants are growing increasingly comfortable around a Form 1040.
Some are interested in getting refunds, like the approximately 80 percent of tax filers who get them each year. Although ITIN users don’t qualify for the Earned Income Tax Credit, which could give a break to an American earning in the same bracket, they can get other tax credits, and can use ITINs to claim dependents in Mexico.
At the end of his session with Ramirez, 18-year-old Diaz found he would have to pay, as he’d expected.
The $800 payment is steep, he said. But if it helps him to build a lawful life in the United States – a life he hopes will include his own janitorial business, and in the future, college – it’s worth it.
“It’s better to stay on the right side of the law,” he said.