- The Washington Times - Saturday, September 6, 2003

The Internal Revenue Service this month will begin revising how it distributes Individual Taxpayer Identification Number cards (ITIN) to keep illegal immigrants from using them for fraudulent purposes.

More than 6 million ITIN cards have been issued since 1996, but only 2 million tax forms have been filed using the ITINs. The status of the other 4 million ITINs is not known, but immigration-reform advocates say illegal immigrants are using the numbers to skirt U.S. immigration, tax and fraud laws.

“The ITIN creates two problems: one for national security and one for identity theft,” said a government source familiar with the cards. “The IRS is well aware of the problems and is going to be taking steps to correct it.”

The federal government’s overhaul of its ITIN distribution system coincides with an increase in activity among the states to monitor and verify identification documents to stem the impact of illegal immigration on their communities.

Ordinarily, states concern themselves with issues involving residency, not citizenship, which is a federal concern. But this year alone, initiatives requiring illegal immigrants to pay out-of-state tuition and requiring proof of legal residence for driver’s license applications have sprung up in Virginia, Mississippi, Georgia, Massachusetts and other states.

The U.S. Census Bureau estimates that between 8 million and 9 million illegal immigrants reside in the United States.

Earlier this year, the Center for Immigration Studies (CIS), an independent nonprofit research group specializing in immigration matters, released a report estimating that more than 800,000 illegal immigrants have entered the country each year since the late 1990s.

It is not known how many illegal immigrants are using ITIN cards.

“The IRS, unfortunately, hands these cards out like candy,” said Rep. Tom Tancredo, Colorado Republican, a leading advocate for stricter immigration laws. “There are not 6 million foreign businesses here, so what’s the purpose of these numbers? They are being used for a lot of reasons, oftentimes for the purpose of obtaining benefits … and they make life easier for those people looking for ways around the system.”

Judith E. Golub, with the American Immigration Lawyers Association, said illegal immigrants “could use [an ITIN] or a fake Social Security number to get a job because an employer can ask only so many questions.”

The ITIN is a tax-processing number the IRS issues to “individuals who are required to have a taxpayer identification number, but do not have and are not eligible to obtain a Social Security Number (SSN) issued by the Social Security Administration,” according to the IRS’ website.

The ITIN resembles the nine-digit Social Security number, but begins with the number 9. The original purpose of the ITIN was to allow foreign nationals who have business interests in the United States, but who do not reside here, to pay taxes on their income.

“It is assumed that individuals who receive an ITIN and do not file taxes are using it as official U.S. government identification to obtain bank accounts, government services and, ominously, driver’s licenses,” CIS fellow Marti Dinerstein told the House Judiciary subcommittee on immigration in June.

The government source said the IRS has become aware of this trend and has heard many “anecdotal stories” of illegal aliens using ITINs for purposes other than that for which they were originally intended. The source said the eventual changes will be “comprehensive … polarizing [and] political,” but said the changes are needed.

The IRS will work with various agencies to receive information and opinions on the changes and will begin an education campaign to alert employers and immigrants of the changes. The government source said changing the cards had been considered for some time, but it became a prominent concern after September 11.

Virginia has tightened its controls on identification documents after it was revealed that some of the terrorists who crashed a jetliner into the Pentagon had fraudulently obtained driver’s licenses and other forms of identification. Beginning Jan. 1, all new applicants for a driver’s license must prove they are legally in the state.

Currently, New Jersey, South Dakota and the District require a Social Security card as a form of government-issued identification when new drivers apply for licenses.

Six states — Kansas, Kentucky, New Mexico, North Carolina, Pennsylvania and Utah — accept the ITIN card as proper identification for a driver’s license.

Minnesota, Mississippi, Oregon and Vermont do not require a Social Security card for a driver’s license.


The remaining 38 states have varying requirements. For instance, 32 states require proof of legal residence. Iowa does not require a Social Security card for nonimmigrant applicants, while Illinois and Kentucky allow for a religious-objection exemption for providing a Social Security number. Connecticut and New Hampshire only require a Social Security number for new applicants.

The IRS recently sent letters to all 50 governors, asking them to instruct their motor vehicles agencies not to accept the ITINs.

“In the coming weeks and months, the IRS is going to be altering … the ITIN form so that it looks less and less like a Social Security card,” said a government source knowledgeable about the issue.

However, the California Senate on Wednesday passed a bill that would allow prospective drivers without a Social Security number to submit an ITIN and one other identifying document, plus a thumbprint, to get a license. Until now, California law required a Social Security number and a thumbprint to get a license. Gov. Gray Davis signed the measure Friday.

What constitutes adequate identification has become a critical issue for advocates for and against increased immigration. Eighteen of the 19 hijackers who flew planes into the World Trade Center, the Pentagon and a Pennsylvania field had state-issued or counterfeit driver’s licenses and identification cards.

Yet long-standing opposition to the creation of a national identification card has remained strong, especially among privacy advocates and civil liberties groups. The legislation that created the Department of Homeland Security last year contained a clause forbidding the creation of a national ID card.

Of particular concern to advocates for stricter immigration rules is that many illegal immigrants from Mexico send a large portion of their earnings to Mexico, bolstering the Mexican economy at the expense of the U.S. economy. Last year, illegal immigrants sent $10 billion to Mexico, Ms. Dinerstein said in her House subcommittee testimony.

Katherine M. Culliton, a legislative staff attorney with the Mexican American Legal Defense and Education Fund (MALDEF), a pro-immigrant-rights organization, acknowledged the large amount of money being sent to Mexico by immigrants — both legal and illegal — but said this development is helping the American economy, not hurting it.

“This is an important source of foreign aid, one that is tax-free to the U.S. government,” said Ms. Culliton.

The Mexican government has encouraged this monetary shift through the widespread distribution and acceptance of matricula consular cards. Issued since 1870, these cards originally were intended to identify individuals as Mexican should they need consular assistance.

The matricula card is accepted as a valid form of identification by police departments, banks and 12 states for driver’s license applications, according to the CIS.

FBI officials recently told a Senate committee the matricula cards pose a criminal and terrorist threat, and are easy to obtain through fraud and a lack of adequate security measures by the Mexican government. Most U.S. agencies that accept the matricula do not perform criminal background checks on their subjects.

“For Mexican citizens who possess one, the matricula has become a shield that hides any past criminal activity,” said Ms. Dinerstein. “This is particularly true for drug traffickers, but also for money launderers and human smugglers.”

Ms. Culliton disputed Ms. Dinerstein’s conclusion, noting that the CIS representative offered no proof during her testimony. She said that because the matricula requires three forms of identification for it to be processed — Mexican birth certificate, Mexican voter card or a Mexican military identification card — it is a secure document that should be accepted.

“America is a nation of immigrants, and no identification is 1,000 percent fraud-proof, but the matricula is safer than many forms of U.S. [identification] … and we are not checking Indiana driver’s license or Canadian identification,” said Ms. Culliton. “[Opposing the matricula] is specifically anti-immigrant and anti-Latino.”

Similar concerns exist over the administration of ITINs and the use of fake Social Security numbers.

When an employer reports a worker’s paycheck withholdings using an ITIN or fake Social Security number, the IRS determines that the number is invalid — a “no match” against its list of legal numbers. The IRS then sends a notice to the employer that the number is not valid. The IRS also fines the employer $50 for each “no match” infraction, up to a total of $250,000.

This usually marks the end of the government’s involvement. The IRS is not required to report the improper use of ITINs to the Bureau of Citizenship and Immigration Services, formerly the Immigration and Naturalization Service. Likewise, the Social Security Administration is not required to report any person whose application for a Social Security card is denied.

“Most instances, [illegal immigrants] know they are not eligible for the card, and they are applying as a formality,” said Carolyn Cheezum, a public information officer for the Social Security Administration. “There is no direct communication with the IRS. It’s the [illegal immigrants] responsibility to take that [information] to the IRS.”

Employers are not required to fire workers who use ITINs or fake Social Security numbers. But many do anyway to avoid the fines, immigration-rights advocates say, arguing that legal and illegal immigrants are often penalized for using erroneous numbers.

According to IRS, Social Security and immigration advocacy officials, the United States has collected more than $200 billion in revenue from “no match” tax returns — presumably from illegal aliens. Immigration advocates say the illegal aliens pay their taxes, but are barred from using the benefits of those taxes, such as public education and housing.

A 1997 report by the National Academy of Sciences (NAS), the most recent and comprehensive on the issue, found that immigrant households paid $133 billion in direct taxes to federal, state and local governments. It also found that typical immigrants or their descendants pay about $80,000 more in taxes than they receive in local, state and federal benefits over their lifetimes.

The NAS study did not distinguish between legal and illegal immigrants. James P. Smith, who served as chairman of the study commission and works as a senior economist with the Rand Corp., said subsequent studies have shown illegal immigrants tend to be less-educated and contribute less to the economy than legal immigrants.

“They pay such a low percentage of income taxes because the vast majority of them make such low salaries. On average, they get back much much more than they put in,” said Rosemary Jenks, director of government relations for NumbersUSA, a group advocating less immigration.

The issues of identification and immigration are playing out most noticeably in the debate over education at the federal and state levels.

Sen. Orrin G. Hatch, chairman of the Senate Judiciary Committee, has introduced legislation that would allow states to ascribe in-state tuition rates to illegal immigrants.

“Many youngsters find themselves caught in a Catch-22 situation,” the Utah Republican said in July after introducing the measure. “As illegal immigrants, they cannot work legally. Moreover, they are effectively barred from developing academically beyond high school because of the high cost of pursuing higher education.”

The Development, Relief and Education for Alien Minors (DREAM) Act would repeal a federal provision that bars states from granting in-state tuition to undocumented aliens. The legislation calls for allowing young men and women who immigrated to the United States before the age of 16, have lived in this country at least five years and who are of “good moral character” a chance to earn conditional resident status upon acceptance by an institution of higher learning or upon graduation from high school.

Currently, eight states have passed laws granting in-state tuition benefits to illegal immigrants — Texas, Utah, California, New York, Washington, Illinois, New Mexico and Oklahoma — skirting the 1996 federal ban by using criteria other than residency. Nine other states are considering extending the benefit.

Last year, Virginia Attorney General Jerry W. Kilgore, a Republican, instructed the state’s colleges and universities to charge the out-of-state rate to illegal immigrants — the only state to take this approach.

The difference between the two rates is significant. For example, Virginia Tech charges $480.24 for three credit hours for in-state students, and $1,682.49 for out-of-state students. The Northern Virginia Community College system charges $169.69 for in-state students and $607.41 for out-of-state students.

An attempt to codify Mr. Kilgore’s recommendation into state law failed this year when Gov. Mark Warner, a Democrat, vetoed the legislation.

A group of illegal Hispanic immigrants Wednesday filed suit against seven Virginia colleges and universities, claiming the schools denied them admission because of their immigration status. The schools are George Mason University, James Madison University, University of Virginia, Virginia Tech, Virginia Commonwealth University (VCU), the Northern Virginia Community College system and the College of William & Mary. The lawsuit seeks their access to the schools.

Educating illegal immigrants in public schools costs states at least $7.4 billion annually, according to a report last month by the Federation for American Immigration Reform (FAIR), which argues that American children are being hurt by the drain on resources.

“Illegal immigration is no free lunch,” said FAIR Executive Director Dan Stein. “It’s about shifting burdens — lowering labor costs at a tremendous cost not only to American taxpayers, but to American kids.”

According to the report, California spends about $2.2 billion annually — more than any other state — to educate illegal immigrant children. Texas and New York rank second and third, respectively.

The report’s authors used the Urban Institute’s estimate of 1.1 million illegal immigrant schoolchildren in the United States, then broke that down by state using the Census Bureau’s estimate for illegal immigrants per state.

The costs are based on per-pupil averages and don’t account for extra costs of providing English as a Second Language classes, nor do they account for disparities of per-pupil costs in different counties in a state.

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