Comprehensive Immigration Reform and a Date with the Tax Man?

Contributed by Aaron Hall, Senior Attorney

A bipartisan group of Senators and the White House have each come out to give the principles for comprehensive immigration reform.  Advocates for reform hope that a bill is presented to Congress in the coming months.

 One of the common principles between the plans is the idea that undocumented immigrants will have to pay back taxes before getting legalized status.  A Politico story questions how back taxes from the undocumented would be calculated and collected and whether the IRS would even want to use its resources to try to collect such taxes.

 

[T]he reality is that between 50 and 70 percent of illegal immigrants who work already pay taxes.  But even if the IRS was able to track down income history for the 30-50 percent of illegal immigrants that don’t pay taxes, Treasury would likely spend more processing the back taxes than it brought in, says Steven Camarota, the director of research at the Center for Immigration Studies, a group that supports limiting immigration.

 

Many of those already paying taxes do so using authentic ITIN numbers provided to people by the IRS regardless of immigration status.  For those who have not been paying taxes, it is unclear whether a reform would attempt to assess an exact amount owed for past years of work or whether it would use a flat amount.  Regardless about how much the back taxes would actually bring in, the provision is politically popular and likely to be in the final bill in one form or another.

 

Further reading:

Senate principles for Immigration Reform

President’s principles for Immigration Reform

Politico Story on back taxes.

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