Law-abiding "illegal aliens": paying taxes for the chance of legal immigration status, or not?

• Author: LeMay, Giseli

1. INTRODUCTION

   Some risk their lives crossing the borders of Mexico for a chance of a better life opportunity in the United States. (1) Others have the privilege to enter the United Sates through the "front door." (2) Yet, once in the United States, they share a common ground: They have officially made it to the land of opportunity. (3) Now, the question is: Should they live in the shadows or become law-abiding "illegal aliens"? (4)

   Although there is a general misconception that unauthorized immigrants (5) do not pay taxes and take advantage of the United States welfare system, the United States collected an estimated total of $10.6 billion in state and local taxes from unauthorized immigrants in 2010. (6) The Center for American Progress suggests that immigration reform would add $109 billion in combined government taxes over a ten-year period. (7) Moreover, immigrants' gain of legal status is likely to increase the overall Social Security trust fund to approximately $606 billion. (8) The Center for American Progress further states that immigration reform would raise enough capital to fund retirement benefits of approximately 2.4 million native-born Americans. (9)

   While the government, by means of Internal Revenue Service ("IRS") regulations, requires all citizens and noncitizens, including unauthorized immigrants to file tax returns, many immigrants are hesitant to announce their presence in the United States to federal agencies. (10) Unauthorized immigrants fear their employers might find out they use false social security numbers ("SSNs"), or that the federal government would find their whereabouts in the United States. (11) However, it is important to note the IRS has records of each tax return filed with an Individual Taxpayer Identification Number (12) ("ITIN")--meaning that the taxpayer does not have a SSN, which places the IRS on notice the person filing the taxes is likely to be unauthorized to work. (13)

   The tension between the IRS regulations requiring unauthorized immigrants to file taxes, and the United States Department of Homeland Security ("DHS") prohibiting these same individuals from lawfully working in the United States, is an ongoing controversy in this country. (14) The DHS, by means of its Immigration and Nationality Act ("INA") regulations, penalizes unauthorized immigrants who falsely claim to be United States citizens for purposes of obtaining employment, irrespective of whether the aliens filed and paid their taxes. (15) This Comment will focus on the inconsistencies between the IRS and the DHS, and suggest a proposal for amending the INA. (16)

   Part I of this Comment introduced the overall inconsistency amongst the government agencies. (17) Part II focuses on the experiences of some unauthorized immigrants and the situations they face as unauthorized immigrants abiding by the law. (18) Part III introduces relevant background information useful to the understanding of who the immigrants are, what it means to be an inadmissible "alien," and the type of waivers for which they may qualify. (19) Part IV provides a brief description of the relevant immigration acts Congress enacted, and what misrepresentation on I-9 Employment Eligibility Verification Form ("Form I-9") means to the DHS and to immigrants. (20) Following this brief explanation on Form I-9, Part V introduces the ITIN, and the issues it raises. (21) Part VI considers the undocumented workers' tax contributions to the United States Government. (22) Part VII discusses recent proposals and their drawbacks. (23) Part VIII suggests a proposal to amend the INA and provide additional relief to certain undocumented workers who paid income taxes and are currently facing deportation. (24) Part IX concludes this Comment. (25)

2. IMMIGRANT LIFE IN THE UNITED STATES

   1. IN THROUGH THE "FRONT DOOR"

      On January 22, 1996, Mr. Ferrans, a citizen of Colombia, entered the United States through the "front door." (26) Mr. Ferrans remained in the United States beyond the expiration of his visa, which placed him in unlawful status as of July 22, 1996. (27) While he remained in the United States past his visa expiration, Mr. Ferrans applied for a job at Jiffy Lube. (28) Because Mr. Ferrans did not have a valid SSN or work authorization, he was unable to truthfully complete the required Form I-9. (29) As a result, Mr. Ferrans completed the form indicating he was a "citizen or national of the United States," thus making a false representation of United States citizenship. (30)

      Approximately two years after Mr. Ferrans applied for the job, he petitioned for adjustment of status to that of a permanent resident. (31) During Mr. Ferrans' interview with the United States Citizenship and Immigration Services ("USCIS"), (32) he testified that he had falsely claimed to be a United States citizen when he completed Form I-9 in connection with the employment application. (33) On March 22, 2006, USCIS denied Mr. Ferrans' petition for adjustment of status, finding Mr. Ferrans inadmissible to the United States and ineligible for adjustment of status pursuant to violation of section 212(a)(6)(C)(ii) of the INA. (34)

   2. THE HARSH REALITY

      Although Mr. Ferrans entered the country through the "front door," he endured the life of an unauthorized worker for several years. (35) Nonetheless, Mr. Ferrans is among the large number of unauthorized immigrants in the United States who must comply with federal tax law and file their tax returns. (36) Oscar and Marcella, (37) a couple from Mexico, filed their tax returns for three years while living illegally in the United States. (38) Oscar works as a busboy at a Manhattan local restaurant, and Marcella stays at home and raises their two children. (39) Although Oscar receives a W-2 from his employer, he does not have a SSN. (40) Oscar used a false SSN when he applied for his job, and he uses an ITIN for purposes of filing tax returns. (41)

      One would wonder, why abide by the rules when you are an unauthorized immigrant and could get "caught" by ICE at any time? (42) Similar to Oscar, a number of unauthorized immigrants are faced with this same question. (43) Oscar and Marcella pay their taxes in hope that one day it will help them earn legal immigration status in the United States. (44) Moreover, the couple is raising two children in this country and see that "Americans take taxes seriously," and for that reason they should abide by the law. (45)

      Other unauthorized immigrants choose not to use false SSNs; rather, they use ITINs to file their taxes. (46) These workers are typically cash earners who work "under the table," and yet, they estimate their income and pay taxes. (47) Unfortunately for these cash earners, the IRS charges them self-employment tax, which is typically higher than the standard wage earners tax. (48) German Tejeda, a tax preparer, explains these immigrants work for the local grocery stores, or restaurants, holding job positions as dishwashers, delivery drivers, domestic workers, and flower sellers. (49) Nevertheless, while these workers are not technically self-employed, they must pay self-employment tax rates. (50)

3. BACKGROUND AND APPLICABLE LAW

   1. WHO ARE THE ALIENS?

      An "alien" is "[s]omeone who resides within the borders of a country but is not a citizen or subject of that country." (51) A person "who, by either birth or naturalization, is a member of a political community, owing allegiance to the community and being entitled to enjoy all its civil rights and protections[,]" is a citizen of that nation. (52) Further, the Constitution provides, "[a]ll persons born or naturalized in the United States ... are citizens of the United States and of the State wherein they reside." (53) As a citizen of the United States, a person has privileges and immunities of the laws of the country, and the right to vote and receive government benefits. (54) However, as an alien, regardless of whether the person is here legally as a lawful permanent resident (55) or not, he or she may be subject to deportation. (56)

      Some permanent resident aliens may qualify to apply for United States citizenship. (57) To qualify for citizenship, resident aliens must meet a required period of physical presence in the United States, must demonstrate good moral character, and must have lived in the United States for at least five years as permanent resident aliens or three years if married to a United States citizen. (58) It is in the resident aliens' best interest to apply to become United States citizens as soon as they become eligible, as they are subject to removability at any time if any of the grounds for removal are met. (59)

      There are a number of inadmissibility and deportability grounds that can subject a resident or nonresident alien to be removed from the United States. (60) An alien may be placed in removal proceedings when he or she is present in the United States or seeks admission to the United States. (61) An example of an alien currently present in the United States who may be placed in removal proceedings is an individual who is admitted into the United States on a visa, such as a tourist or student visa (62) and overstays that visa. (63) For purposes of the INA, when an alien currently present in the United States applies to "adjust" his or her status to that of a lawful permanent resident, he or she is seeking admission to the United States, even though he or she is already present in the country. (64) Thus, if an alien is inadmissible, he or she may be ineligible from adjusting his or her status to that of a permanent resident. (65)

   2. INADMISSIBLE ALIENS

      Out of concern for increased fraudulent activity and lenient access to various federal benefits, Congress enacted the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 ("IIRIRA"). (66) As part of the IIRIRA enactment, Congress added new grounds of inadmissibility to section 212 of the INA. (67) One of the established grounds of inadmissibility...