The danger of a potential IRS-ICE deal, for undocumented people and citizens

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Washington, DC – Below is a column by Maribel Hastings from America’s Voice en Español translated to English from Spanish. It ran in several Spanish-language media outlets earlier this week:

In another sign of bad public policy, and the devaluation of the billions of dollars that immigrants contribute to the Treasury, the Internal Revenue Service (IRS) may collaborate with the Department of Homeland Security, specifically ICE, to confirm the names and addresses of undocumented people with final deportation orders, according to various media reports.

The IRS has always urged undocumented immigrants to pay their taxes, and it is calculated that between 50% and 75% of undocumented immigrants’ households file annual tax returns using their Individual Taxpayer Identification Number (ITIN), which the IRS gives to some categories of non-citizens who cannot obtain a Social Security number.

It’s about complying with federal tax laws and demonstrating that they have “good moral character” in case, at some point in time, they could regularize their migration situation. They also have proof of their work history and physical presence in the United States.

Up until now, the confidentiality of the process has been respected, precisely in the face of fear that taxpayers’ personal information, especially if they do not have documents, could be improperly used against them. Like the ex-Republican President Richard Nixon did, to persecute his political “enemies” amid the Watergate scandal.

According to Congress.gov, “Section 6103 of the Internal Revenue Code provides that returns and return information are confidential, and may not be disclosed except as expressly authorized by the Code. Congress has established some exceptions to this general prohibition.”

However, a lawsuit to impede the agreement, filed by two pro-immigrant organizations in Chicago, affirms that DHS and ICE do not represent an exception that justifies violating the confidentiality rule for immigration purposes.

April 15, Tax Day, is once again around the corner. It remains to be seen the effect that this news will have on undocumented people, who fear that the government will come to their homes to detain and deport them, and on the Treasury which would stop receiving millions of dollars if those undocumented people opt to not pay their taxes, or are removed from the country.

A report from the Institute on Taxation and Economic Policy concludes that “undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022.”

“More than a third of the tax dollars paid by undocumented immigrants go toward payroll taxes dedicated to funding programs that these workers are barred from accessing.” “Undocumented immigrants paid $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes in 2022,” which they cannot access because they lack documentation, according to the report.

A new analysis from Americans for Tax Fairness found that “undocumented immigrants pay a higher effective tax rate than 55 large corporations and several of the nation’s wealthiest individuals. The report also found that undocumented immigrants use far fewer federal resources than major corporations, which receive billions in subsidies.”

According to the paper, “their 10.1% state/local tax rate exceeds the top 1%’s 7.2% rate in most states…. Undocumented immigrants’ 5.27% federal tax rate exceeded that of some wealthy Americans and corporations.”

Various negative aspects converge in this story. First, how the Trump administration disdains the multi-billion dollar contributions undocumented people make to the government coffers, which would be even bigger if they were legalized. You never hear Trump talking about those contributions from undocumented people, who also work in key industries, because that reality does not fit into his narrative that they are all “criminals” who represent a “drain” on the government.

Secondly, a collaboration agreement would result in those immigrants, or even citizens married to undocumented people, no longer paying taxes for fear of being identified, detained, and deported.

And thirdly, it represents a dangerous assault on confidentiality and privacy, not only for undocumented people but for all those who pay taxes.

Today, the government can use tax information to persecute undocumented people. Tomorrow they can persecute you, even if you are a citizen, arguing other reasons. Without a doubt, a slippery and dangerous slope.

The original Spanish version is here.