Many Undocumented Immigrants Pay High Price for Freedom

By Jake Geller
June 4, 2007 9:25 AM

When you walk into Emanuel and Rosa's modest two-bedroom condo in a working-class neighborhood of metropolitan Phoenix, the first things you notice are the toys of their 4-year-old son and 18-month-old daughter. Pieces of a U.S. map puzzle lie scattered across the floor. A Big Wheel sits on the back patio.

Emanuel and Rosa appear to be living the American dream. They're raising a family, working and filing their taxes -- except they're undocumented workers. Their names have been changed to protect their identity.

Illegal immigrants like Emanuel and Rosa are filing taxes at record levels. It's not about the money; it's about a chance to become U.S. citizens and step out of the shadows. As part of the immigration proposal put forward by President George W. Bush in April, filing taxes and proving employment would be required for citizenship.

Emanuel immigrated legally from South America on a six-month tourist visa in January 2000, then received a one-year extension. He came to find a job. With a 20 percent unemployment rate in his homeland, there were few jobs for either skilled or unskilled workers.

After his visa expired, he never left the U.S. He has been here illegally for the past six years.

To immigrate to the U.S. and work legally would have been too expensive. Legal immigration from his home country is "only for rich people," Emanuel said.

When Emanuel arrived in the U.S., he took English classes at a local community college and lived with his cousin, who was here on a student visa. To make ends meet, Emanuel did odd jobs such as babysitting and housecleaning. He was usually paid in cash, with no withholdings or record of employment.

His tourist visa didn't allow him to work, so Emanuel used a fake Social Security number and a bogus name to land a job cleaning bathrooms in office buildings. Three months later he took a second job stocking grocery store shelves. For the next six months he worked both jobs, making about $350 for a 70-hour week.

Dawn McLaren, a research economist with the JP Morgan Chase Economic Outlook Center at Arizona State University, explains the "interesting system" that has been in play for the last 20 years, since the 1986 federal amnesty gave legal status to more than 2.7 million undocumented immigrants.

"It's a system where an employer, as long as he doesn't knowingly hire an illegal immigrant, will not be sanctioned and will not face fines and will not be in any trouble whatsoever," she said.

After working and studying for a year, Emanuel returned home in January 2001 to marry Rosa and bring her to the U.S. He flew back to Phoenix. Rosa was smuggled into the country from Mexico because it was too difficult to get her a tourist visa.

Rosa worked at a check-cashing store for six months until she got pregnant. She made only $6.25 an hour but was able to network with customers to find better-paying jobs for Emanuel.

Emanuel did maintenance work at a bakery through a temp agency. He had to quit when the bakery wanted to make him a permanent employee. The temp agency had accepted copies of his fake work papers, but the bakery required original documents.

Emanuel needed to buy a Social Security number that belonged to a real person. Undocumented workers can easily find people who sell identities on the streets in immigrant neighborhoods. These documents are either stolen from U.S. citizens or purchased from individuals, such as the homeless and jail inmates, according to the U.S. Immigration and Customs Enforcement (ICE).

When the undocumented buy identities, they don't know whether the names and numbers are valid until they use them. Even though they're using the numbers only to secure jobs, they're still committing identity theft.

"When we get amnesty or reform, they have to forgive the people for using those [stolen Social Security] numbers," Rosa said.

Emanuel has been filing taxes for the past four years using an Individual Tax Identification Number (ITIN). The IRS issues these nine-digit tax numbers to individuals who aren't eligible for Social Security numbers. ITINs are not only for undocumented workers but also for foreign nationals legally in the U.S., such as foreign investors and the foreign-born spouses and dependents of U.S. citizens.

In July 2006 IRS Commissioner Mark Everson released statistics about ITINs in testimony before the U.S. House of Representatives:

• In 2005 more than 2.5 million tax returns were filed using ITINs.
• Applications for ITINs had increased 25 percent over the previous year.
• Between 1996 (when ITINs were established) and 2004, the IRS estimates that $50 billion in taxes were filed using ITINs.

Emanuel owed the IRS about $400 the first year and received refunds totaling $2,500 the following three years. Nevertheless, he still worries about being discovered, then arrested or deported.

When Rosa called the IRS for more information about how to file their taxes, she explained their situation. The IRS representative didn't care about their immigration status. The IRS cares only that you pay your taxes, she said.

"They're giving me an open door to do it [work illegally]," Rosa said.

The U.S. Immigration and Customs Enforcement (ICE) isn't interested in illegal immigrants who file their taxes because the agency doesn't have legal access to tax information, except in rare circumstances like national security.

"As an agency, we're respectful of the constraints and the laws that dictate how other federal agencies operate," said ICE spokesperson Virginia Kice. "It goes back to the IRS and federal law governing the release of tax information."

Even though Emanuel and Rosa file taxes, they'll never receive the money withheld for Social Security or Medicare while they're undocumented workers. Once they become U.S. citizens, however, they'll be eligible for those benefits.

Those withholdings are held by the Social Security Administration and aren't tracked by the IRS or associated with their ITIN. Emanuel and Rosa view this money as the price of working in the U.S. Getting a refund is a bonus, but the only reason they file taxes is because it's one of the requirements for amnesty in recent immigration reform proposals.

When the name on the withholdings doesn't match the Social Security number, that money goes into the Social Security Administration's Earnings Suspense File. Economist McLaren estimates that there's about $56 billion in that file.

Emanuel now earns about $12 an hour as a civil engineer at an engineering firm in the Phoenix area. He studied civil engineering in his home country. "I know that I'm in a lot better situation, a better position than a lot of other immigrants," he said.

He's paid about half of what he'd earn if was a licensed engineer. He has the knowledge and education, but since he's not using his own identity, he can't prove his engineering qualifications.

Emanuel and Rosa hope that amnesty or another path to citizenship for undocumented workers will be part of future immigration reform. If policies change, Emanuel plans to be sponsored by his current employer and be paid for the work he's trained to do.

For the time being, Emanuel and Rosa will remain in the shadows.

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