Why some immigrants file tax returns even if in the country illegally

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With April 15 right around the corner, Americans are scrambling to fill out their returns.

And while many aren’t aware of it — so will a lot of immigrants living in the country illegally. While experts still argue over the net economic impact of these immigrants on the government purse, more than 50 percent pay some federal taxes.

On a recent afternoon, Marcela, who doesn’t want her last name used because she’s still applying for permission to stay and work in the U.S. legally, worked her way through the crowded halls of her 3-year-old son’s school in North Philadelphia. Her son, Jose is a citizen and attends a bilingual Head Start classroom.

Marcela zipped up his coat, and helped him put on his Ninja Turtles backpack. Before he started school, he used to come with her when she cleaned houses.

“He would sit. I would bring toys and his food,” she explained in Spanish.

It costs taxpayers approximately $9,000 per child who attends a Head Start program, according to figures provided by the U.S. Department of Health and Human Services.

And while she doesn’t know the exact figure, Marcela knows there’s a cost. She’s not living in a vacuum. She says she pays files a tax return because she wants to pay her share.

“For me, it’s like a defense to say that I am not just taking from the government. Just the opposite. I contribute. I’m contributing to them,” she said.

While estimates vary, most researchers across the political spectrum agree that more than half of immigrants in the country illegally pay some federal taxes – mostly by supplying employers with fake Social Security numbers.

A “magic social security number,” Will Gonzalez calls it. Gonzalez is the excutive director of CEIBA, a North Philadelphia nonprofit that helps low-income people prepare their taxes. He explains immigrants using false Social Security numbers will have had payroll taxes withheld from every paycheck.

He explains the Internal Revenue Service made a policy of prioritizing collecting money over pursuing whether a person is authorized to work in the U.S. That means the agency accepts tax returns filed with a mismatched Social Security numbers or alternative tax ID numbers. The IRS says it has no recent statistics for what it took in. But the Social Security Administration estimated that it received $12 billion in 2010 in excess payments from people working in the country illegally.

“There are a number of reasons why people would want to file a tax return,” explained Gonzalez. “One, you’re legally supposed to. Number two: if you have aspirations for someday becoming attaining citizenship in the United States, it’s regarded as a demonstration of good moral character that you’re paying your taxes.”

There are other factors too. CEIBA estimates it has helped 500 immigrants to apply for an alternative tax ID number known as  an ITIN, which can be used to pay taxes, but also to build credit and sign up for commercial services like cable TV.

Since no one asks for your legal status at the cash register, immigrants also pay sales and other local taxes. The Institute for Taxation and Economic Policy estimates that, in 2010, immigrants in the country illegally paid $149 million to Pennsylvania and $476 million to New Jersey. That figure is mostly made up of sales taxes and property taxes.  The latter is paid indirectly from rent shelled out to immigrants’ landlords.

While that may be true, Steve Camarota still argues that because a lot of immigrants in the country illegally work low-wage jobs, they will receive more from the government in services than they contribute. 

Camarota, director of research for the conservative-leaning Center for Immigration Studies says the benefits received per household are significant when they include benefits to their U.S. citizen children.

“Our whole welfare system is designed to help low-income children and that describes a very large fraction of children in illegal immigrant families, given all we know about their [parents’] educational attainment.”

Camarota’s position is that, citizens or not, the kids wouldn’t be there without their parents. One of the biggest costs he identifies is the free public education for those American-born children.

However, he also acknowledged that reading this balance sheet can be very subjective.

“For the general public, they just sort of, wherever their sort of orientation is, they’re going to tend to gravitate that way and say they don’t pay any taxes and that’s one reason why they have a dim view of illegals; and the people with the most positive view of illegal immigrants will say ‘they don’t use any of this welfare.'”

Randy Capps of Migration Policy Institute argues this whole equation of taxes paid versus services received leaves out a lot. He points out that immigrants work and spend money in their communities. and considers educating their U.S. citizen children a good long-term investment.

“School children today,” he observed, “including children of immigrants are tomorrow’s workers. And we all benefit from them getting a better education and being more productive and paying more taxes in the future.”

Marcela, the woman with her child in Head Start describes seeing that investment firsthand as she walks her son home. Jose, who can be quiet around adults will talk more with his friends in his class.

U.S. taxpayers could lose that investment in Jose. His mom says it hasn’t been easy, living for the most part off the books, unable to travel and see family. Often, Marcela thinks about going back to Mexico.

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