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Many undocumented immigrants find work in the United States while they are undergoing an immigration process, or even if they haven’t yet found a way to adjust their status. The Institute on Taxation and Economic Policy estimates that at least 50% of these undocumented workers pay annual taxes. In 2022 alone, undocumented immigrants contributed over $96 billion in federal, state, and local taxes. Some use Individual Tax Identification Numbers (ITINs) to pay their taxes, while others have taxes automatically deducted from their paychecks.
Recently, Immigration and Customs Enforcement (ICE) requested that the Internal Revenue Service (IRS) disclose the personal information of 700,000 suspected undocumented immigrants in the U.S. who file taxes. The IRS rejected this request, stating that providing taxpayer information to third parties, including the Department of Homeland Security (DHS), is a crime carrying both criminal and civil penalties.
The IRS’ criminal investigation team will still be partnering with the DHS to detect and pursue employers hiring undocumented immigrants. However, they claim that they will not target specific undocumented immigrants in their records. To encourage continued tax compliance, the IRS asserts that they will not share undocumented immigrants’ information with DHS or any third party.
If the DHS had successfully pressured the IRS to share the personal information of undocumented immigrants, it could have had a detrimental impact on this segment of the taxpaying population. Many undocumented immigrants might have refrained from paying taxes. This would in turn have potentially reduced contributions to certain public programs such as Social Security, Medicare, and unemployment insurance – even though undocumented immigrants are not eligible for these programs.
Should Undocumented Immigrants Still File Taxes?
Regardless of immigration status, all individuals working in the U.S. are required to file taxes annually. This is a federal regulation, and avoiding tax filings and payments can have serious consequences. While there is cause for concern, undocumented immigrants should remain confident that the IRS will not share their personal information with third parties, as doing so would not be in the agency’s best interest.
What Are the Benefits of Paying Taxes in the U.S.?
- It could help put future applications you may file for an immigration benefit in a favorable light.
- It could help establish you as an individual with “good moral character.”
- It could help document your work history in the U.S.
If you’re an undocumented immigrant who is concerned that the IRS will divulge your personal information, or if you have questions regarding another immigration legal matter, contact U.S. Immigration Law Counsel for a strategy session to discuss your case.
