Even for undocumented workers, it's still tax season

Victor Contrera
Centro Campesino Executive Director Victor Contreras (bottom right) explains the process of filing a state and federal income tax returns to two women who live and work in Minnesota illegally. State and federal revenue authorities expect to collect taxes from thousands of people working in Minnesota illegally this year.
MPR Photo/Elizabeth Baier

For the last six years, Maria has cleaned hotel rooms in Owatonna. She uses a fake Social Security number to work about 32 hours a week, earning $8 an hour.

Maria, 47, moved to Minnesota from the state of Tamaulipas on the U.S.-Mexico border 11 years ago. Minnesota Public Radio has agreed not to fully identify her because she's in the country illegally.

When she started working, she knew nothing about how the U.S. tax system worked.

"Every year, I'd hear people say 'The taxes are coming. We have to do our taxes,'" she said. "And I would wonder: what are taxes?"

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Maria started asking around, and friends told her the government required workers to pay taxes. For the last five years she has paid state and federal taxes. Last year, she earned about $10,000. She filed her taxes several weeks ago and received a $113 federal tax refund.

She's among millions of people who live and work in the country illegally, but nevertheless participate in the nation's annual tax-filing ritual. State and federal revenue authorities expect to collect taxes from thousands of people working in Minnesota illegally this year.

Maria paid $622 dollars toward Social Security and $100 for Medicare through payroll taxes withheld from her wages in 2010.

But because Maria is not legally in the United States, she'll never receive Social Security and Medicare benefits. She will not be eligible for Medicare later in life.

"I feel good paying [taxes] because I'm contributing to the government."

Still, Maria files a tax return, hoping that one day Congress will approve a path to legal residency and citizenship for immigrants like her. If that happens, she believes she'll have a record to show she's done right by the law by paying taxes.

"Even though I don't get that money back, I feel good paying because I'm contributing to the government," she said. "I also pay in case one day I become a resident I have proof of what I've done here in the United States."

Immigrants like Maria cannot legally obtain a valid Social Security number. They buy one on the black market, fraudulently use someone else's, or make one up. Some employers don't verify that the Social Security number is real or belongs to their employee.

Because she does not have a valid Social Security number, Maria uses something called the Individual Tax Identification Number to pay taxes.

The Internal Revenue Service created tax ID numbers in 1996 to collect taxes on foreigners with investments in the United States. That allows non-residents — including immigrants not authorized to work in the United States — to use the numbers to file taxes.

At least 10,000 immigrants working illegally in Minnesota will file tax returns this year, said Jonas Parra, Latino Outreach and Education Coordinator for the Minnesota Department of Revenue. He said the agency's job is to collect taxes from all Minnesota workers, regardless of their legal status.

"The IRS and the Department of Revenue don't really care much about what your immigration status is," Parra said. "They're just enforcing the law of 'You work here, you live here; therefore you need to file a tax return.' And neither the Department of Revenue nor the IRS can or will or do exchange any of that information with any immigration offices at all. That's illegal, basically."

While the largest percentage of unauthorized immigrants filing taxes live in Minneapolis and St. Paul, cities like Worthington, Winona and St. Cloud have concentrations of workers filing with individual tax ID numbers.

"Especially where there's all those meat-packing companies and things like that, there's a big concentration of, in this case, Latinos," Parra said.

State and federal tax officials treat returns filed with tax identification numbers almost entirely the same as those filed with Social Security numbers, according to Parra.

However, workers who file their state taxes in Minnesota with a tax identification number do not qualify for the working family credit or a property tax credit. Workers who file their federal tax returns with tax identification numbers do not quality for the federal earned income credit, he said.

IRS officials declined to comment for this story. But proponents of stricter immigration laws say something should be done to address what they see as a contradiction between IRS and immigration policies.

"We shouldn't let anybody work, knowingly, in the United States on false Social Security numbers," said Steven Camarota, director of research at the Center for Immigration Studies. The advocacy group based in Washington D.C. favors more limits on immigration.

The fact that the IRS has made it easy for people like Maria to file taxes is another reminder of the country's complex relationship with illegal immigrants, said Camarota, who believes the overall cost of undocumented workers and their U.S.-born children outweighs their financial contributions.

"For IRS and Social Security, they view it entirely as a bureaucratic imperative: 'Someone's here, let's collect taxes.'" Camarota said. "In the process of them pursuing their bureaucratic goal, they kind of have their head down and haven't realized how much they've facilitated illegal immigration."

For thousands of immigrants in Minnesota like Maria, that contradiction doesn't matter nearly as much as establishing a record in case one day they find a way to legalize their status in this country.