Fake social security numbers are against the law, but the IRS tolerates them when used for employment purposes. This is true even when the Social Security administration notifies them about the fraud. This is so that the U.S. government can tax the earnings of illegal immigrants.
When called on this breach of the law, IRS officials say, “no harm, no foul.” Isn’t it better, they say, that illegal immigrants have to pay taxes, rather than that they earn their wages tax free?
Well, if they couldn’t get on payrolls because they didn’t have a genuine social security number, they wouldn’t be getting jobs, so they would have no incentive to be entering the country illegally! This sounds like an obvious area for enforcement, if the government were interested in any kind of enforcement.
The Social Security Administration tries to prevent fraudulent use of Social Security Numbers, the nine-digit numbers used for nearly every significant financial transaction in America. When it becomes aware of fraud, it tells other agencies that deal in people’s Social Security numbers.On Tuesday, [Senator Dan] Coats confronted IRS Commissioner John Koskinen over the fact that his agency does the opposite, deliberately overlooking known fraudulent use of numbers for employment purposes, even when notified of specific frauds by the SSA.
“[T]he IRS,” Coats noted, “continues to process tax returns with false W-2 information and issue refunds as if they were routine tax returns, and say, ‘That’s not really our job,” Coats said. In his investigation, he went on, he also learned that “the IRS ignores notifications from the Social Security Administration that a name does not match a Social Security number, and you use your own system to determine whether a number is valid.”
At issue is the fraudulent use of fake numbers by illegal immigrants seeking employment. Koskinen responded that IRS policy of consciously accommodating such fraud helps the agency collect more in taxes, so “it is in everyone’s interest.” He added that the agency tolerates identity fraud for employment purposes, but not if real people’s Social Security Numbers are used to defraud their holders — for example, by fraudsters who file fraudulent tax returns in order to collect someone else’s refund. As long as illegal immigrants use a separate Taxpayer Identification Number in order to file their tax returns, he said, there is no harm, no foul.