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In 1996 the Federal Internal Revenue Service (IRS) created INDIVIDUAL TAX IDENTIFICATION NUMBERS (ITIN) so that people that do not qualify for a Social Security number can file their tax returns. The IRS is required by federal law to collect income taxes from everyone that receives income regardless of their immigration status, including undocumented immigrants. Since undocumented immigrants do not qualify to participate in the Social Security system, they are not issued Social Security numbers. The ITIN allows them comply with federal tax laws and file a tax return.
Unfortunately, this simple and useful procedure has often proven to be confusing and misunderstood. Anti-immigrant activists have made incorrect statements about the purpose and effect of allowing undocumented immigrants to use them. They have said that the ITIN allows undocumented immigrants to avoid being detected by immigration officials because the IRS does not report ITIN users to immigration authorities. These critics also say that the 1986 Immigration Act requires all federal agencies to exchange information about immigrants and that anyone using an ITIN must be undocumented. This is not true since some lawfully admitted temporary immigrants must also use an ITIN.
Critics also say that undocumented immigrants illegally use ITINs to wrongfully claim and receive income tax refunds. This is not true. The IRS legally provides tax refunds to people who paid too much regardless of immigration status. Undocumented immigrants have too often been the victims of cruel and costly scams and fraud involving ITINs. Immigrant victims have been tricked into paying for ITIN cards even though the can be easily obtained without charge directly from the IRS. They have also been told that ITINs give them the right to work, to qualify for Social Security benefits, and that it can be used as identification for drivers’ licenses. This is not true.
ITINs were created for foreign investors and visitors who owe the U.S. government taxes and are ineligible for Social Security numbers. ITINs allow immigrants to prove that they lived in this country, to open bank accounts and obtain credit cards at many banks, and to obtain loans and establish a positive credit history. Paying taxes is considered “good moral character” by immigration officials. If Immigration Reform legislation is passes, using an ITIN to pay income taxes now may help undocumented immigrants to satisfy one of the requirements for permanent residency.
The use of ITINs in appropriate situations can provide many useful benefits to undocumented immigrants. Knowing what ITINs can and cannot do will allow them to avoid being defrauded by unscrupulous people that prey on innocent immigrants. ¡NO SE DEJE! ®
Jess J. Araujo, Esq.