IRS in deportation push an illegal drain on Social Security, advocates say

A new tactic the Trump administration says will be a net positive for taxpayers by using the IRS to track down immigrants in the country illegally has outraged advocates who say it violates federal law and will take billions from the financially struggling Social Security system.

The federal government last year started trying to locate immigrants who use Individual Tax Identification Numbers, or ITINs, by getting the IRS to turn over their names and addresses to U.S. Immigration and Customs Enforcement, according to court papers.

The government obtained information on about 47,000 immigrants before a judge put a halt to the practice in November. Several high-level IRS officials resigned last year in protest of the agency’s data-sharing agreement with ICE.

Paying in, getting nothing

Millions of immigrants who work while living in the United States illegally use ITINs to pay taxes on their wages because they cannot obtain Social Security cards. These immigrants pay about $59 billion a year into federal programs including Social Security and Medicare but never get a penny back because they are not eligible for the programs, said Ben D’Avanzo, a senior policy strategist at the National Immigration Law Center.

Immigrant advocates say the Trump administration's tactic could funnel off billions of dollars in federal tax revenue meant to fund Social Security and other programs. A federal report released in June warned that Social Security’s primary trust fund was expected to run out in late 2032 unless Congress steps in to shore up the program's financial health, according to a Newsday story at the time. 

"I think it’s outrageous," Patrick Young, a longtime immigrant advocate on Long Island and a professor of immigration law at Hofstra University Law School, told Newsday of ICE using the IRS.

"The whole purpose of" ITINs "is to have people pay as much tax as they owe," Young said, "not to try to track people down for expulsion from the United States."

Immigrants pay taxes through ITINs because it shows good moral character and can help their case when they try to legalize their status and become U.S. citizens or legal permanent residents, D’Avanzo said. They also can use ITINs to open bank accounts, apply for credit cards and, in some states including New York, apply for driver’s licenses. 

Immigrants in the United States without legal authorization who use ITINs pay $25.7 billion a year into the Social Security system, according to the Institute on Taxation and Economic Policy, a nonpartisan nonprofit organization in Washington, D.C. They also pay $6.4 million toward Medicare and $1.8 billion toward federal unemployment insurance, the center states. They contribute a total of $96.7 billion a year in federal, state and local taxes.

Enforcing the law

The Department of Homeland Security defended the practice of using the IRS and ITINs to locate people in the United States illegally.

"Under President Trump’s leadership, the government is finally doing what it should have all along — sharing information across the federal government to solve problems," DHS said in a statement to Newsday. "With the IRS information specifically, DHS plans to focus on enforcing long-neglected criminal laws that apply to illegal aliens but which the Biden Administration ignored."

The agency did not respond to questions about the lost revenue for Social Security and other programs that could result from the crackdown.

DHS has suggested the IRS could help it locate as many as 7 million people in the country illegally who use ITINs, which is a nine-digit identifier. ICE obtained information on 47,000 immigrants last year before a federal judge, Colleen Kollar-Kotelly, halted the practice, saying it broke the law.

The government appealed but lost in September when a U.S. appeals court based in Washington, D.C. kept the ban on using the IRS intact.

Advocates fear the Trump administration’s use of the IRS as part of its wider immigration crackdown is far from over. The federal government is considering including a box on next year’s Form 1040 tax returns asking people if they are U.S. citizens or legally authorized to work in the United States, according to media reports.

The IRS can share information with federal agencies in certain limited situations, such as an ongoing criminal investigation or a health threat such as a person who went to a blood bank and unknowingly received a transfusion of HIV-infected blood, said Nina E. Olson, executive director of the Center for Taxpayer Rights, a Washington, D.C.-based nonpartisan nonprofit.

Doing so to enforce immigration laws is not one of the permitted uses, said Olson, whose group was a lead plaintiff in a lawsuit to stop the practice.

"By law, tax return information is confidential, unless there's an exception," she said. The IRS’s "job is to administer the tax system, not the immigration rules."

'Gross violation'

Olson said she has worked in the tax sector for 50 years and served as National Taxpayer Advocate of the United States, an independent organization within the IRS that helps taxpayers resolve issues with the agency.

"It’s unprecedented," she said of the current effort to use the IRS to track down immigrants.
D’Avanzo said the practice is a "gross violation of privacy" and "shameful."

"It's really part of this broader ecosystem where all parts of the federal government, including agencies that have no role and should never have a role in immigration enforcement," are being used for mass deportation, he said.

Supporters of President Donald Trump's aggressive actions aimed at tightening the borders have lauded enlisting the IRS as part of the effort.

Ira Mehlman, a spokesperson at the Federation for American Immigration Reform, a Washington, D.C. group that favors stricter limits on immigration, said in a statement to Newsday that ITINs provide "important information for ICE to identify people who are legitimately subject to enforcement by that agency."

"The IRS provides information to other law enforcement agencies," Mehlman said, "and there is no reason why it should be precluded from sharing information with ICE."

In the process, Olson said, the IRS/ICE crackdown could hurt programs like Social Security in several ways. As illegal immigrants who use ITINs are arrested and deported, their taxes will no longer go into the Social Security system, she said.

Second, many of those here without authorization are becoming afraid to use ITINs and file their taxes, since it may lead to ICE tracking them down, according to Olson. That could lead to further loss of government revenue.

Rogelio, 42, an immigrant from Mexico who is here illegally, told Newsday he used an ITIN for years and paid taxes because he wanted to improve his chances of gaining legal status.

But he stopped doing so in 2018 during the first Trump administration because he feared ICE would arrest him. He has been saving money in the bank to pay back taxes in case the immigration crackdown ends someday, he said.

"I am afraid. We are all afraid," Rogelio said in Spanish. Rogelio asked that his last name not be used because he fears repercussions.

Hofstra’s Young said he would advise immigrants that filing taxes now using an ITIN "may be a danger" even if the courts have ordered the IRS to stop the data-sharing practice with ICE.

He expects many immigrants like Rogelio to go into the shadow economy, where they work for cash and don’t file tax returns or pay income tax.

"People have relied on promises by the IRS to not use this information for immigration round ups and now they switched and they are trying to use it," he added. "It doesn’t just hurt the immigrants. It hurts the United States' budget."