Mexican nationals applying for U.S. visas
Mexican nationals, applying for visas to enter the U.S., wait outside of the U.S. Consulate in Monterrey, Mexico. (Image: Guillermo Arias / AP Photo)
Treasury Report: 87% of LEGAL immigrants obtained their employment through identity theft

A shocking report released on Thursday by the U.S. Department of Treasury reveals identity theft by legal immigrants is far greater than previously estimated.

Identity theft by LEGAL immigrants far greater than previously known

The U.S. Treasury Inspector General for Tax Administration issued a shocking report on Thursday that shows a staggering 86.6% of immigrants who pay taxes in the U.S. obtained their employment by stealing a U.S. citizen’s identity.

What is an Individual Taxpayer Identification Number (ITIN)?

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the U.S. Internal Revenue Service to foreign aliens who reside in the U.S. An ITIN number permits foreign aliens to comply with U.S. tax reporting laws while they reside inside the U.S.

An ITIN number is issued regardless of an immigrant’s status because both resident and non-resident aliens may have legal obligation under U.S. tax codes.

Obtaining an ITIN number does NOT grant permission for the immigrant to work in the U.S.

Obtaining an ITIN number does NOT grant permission for the immigrant to work in the U.S. For example, a non-resident spouse of a U.S. citizen is issued an ITIN number, to permit their citizen spouse to list them as a dependent on their own U.S. tax return for dependent/deductible purposes.

A foreign alien who wishes to work inside the U.S. is required to obtain valid work authorization, such as a work visa. After obtaining valid work authorization, they may then pay taxes under that employment using their ITIN number.

Report: 86.6% of legal immigrants who pay taxes in the U.S. obtained their employment through identity theft

Every year, the IRS receives approximately 2.4 million tax returns filed by legal immigrants paying taxes through their employer using an ITIN. The Treasury report reveals, however, that a staggering 86.6% of those immigrants obtained their employment through identity theft, using a stolen social security number belonging to someone else.

Even more alarming, the report acknowledges that the IRS does not have the resources to correct the problem. The Inspector General’s report found the IRS failed to even identify 497,248 victims of employment-related identity theft, despite the fact that a foreign alien paid taxes using their own ITIN after obtaining that employment using a social security number issued to someone else. An additional 60,823 victims were identified, but the IRS failed to flag the tax account with an appropriate identity theft marker.

In all, the report estimates 1.4 million Americans were affected by ITIN/employment fraud in 2015 alone.

10 recommendations made to correct the problem.
IRS adopts 1.

The Treasury Inspector General’s report identified 10 recommendations it made to the IRS to address the issue, however, the IRS reportedly adopted only 1 of the recommendations.

Treasury Inspector General J. Russell
Treasury Inspector General J. Russell George (Image: Reuters)

J. Russell George, the Inspector General, was understandably concerned about the scale of the problem. “Cases of employment identity theft can cause significant burden to innocent taxpayers,” he said, “including the incorrect computation of taxes based on income that does not belong to them.”

IRS issues response to the report

Kenneth C. Corbin, commissioner of the IRS’s Wage and Investment Division, responded to the report with a statement that read, “Regardless of the type, the IRS takes IDT fraud very seriously and has expended substantial resources to identify and stop tax fraud and the victimization of innocent taxpayers when their personally identifiable information is misused.” Corbin added, “Since February 2011, we have been identifying returns that reflect discrepancies between the wages self-reported by a taxpayer and wages attributed to the taxpayers as reported by an individual using that taxpayer SSN.”

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