The Internal Revenue Code (the “Code”) requires all individuals to file a tax return when their income falls into certain categories. For example, according to Internal Revenue Service (“IRS”) Publication 17, a single person under 65 years of age must file a tax return if the person’s income in 2006 was $8,450.00 or more. As another example, a married couple filing jointly, both of whom are under 65 years of age, must file a tax return if their combined 2006 income was $16,900.00 or more. In order to file a tax return an individual must have a unique identification number. For many people, this number is a Social Security Number (“SSN”). However, some non-citizens, including undocumented individuals, are not eligible to receive an SSN. In 1996, the IRS recognized this issue and started issuing these individuals an Individual Taxpayer Identification Number (“ITIN”) to use in filing tax returns and paying taxes. For many reasons, it is very important for citizens and non-citizens alike to file tax returns every year if their income requires it. One good reason is that a person may be subject to fines, penalties, and a jail sentence if the person fails to file a tax return. A person can also be subject to separate and additional fines, penalties, and a jail sentence for failing to pay taxes. On the other hand, a person may be eligible to claim exemptions or credits for dependents, and in some cases may be able to receive a refund of the tax withheld from wages. If a person has children, he may be eligible for the child tax credit, and, depending on the income, he may be eligible for the earned income tax credit (“EITC”), although the EITC is only available to citizens and permanent residents. A second reason to file a tax return is that it is a symbolic act for immigrants and an important step in becoming a resident and/or a citizen. When applying for most immigration benefits, a person is required to submit copies of tax returns for the past three years. For example, when a non-citizen applies to adjust status to permanent residency (to obtain a “green card”), he is required to show proof that he paid taxes for the past three years. As another example, a person who submits a petition for an immigrant visa for a family member also must prove that he has enough income to support the family member in the U.S. To prove this, he must submit a certified copy of his tax returns for the past three years. Yet another example is the case of a non-citizen who has been a long-time permanent resident who gets placed in deportation proceedings. When applying for a waiver or other relief from deportation, the non-citizen must show that he has continuously resided in the U.S. for a certain number of years, and the immigration courts like to see copies of tax returns for the past several years. Some people may worry that the information given to the IRS when applying for an ITIN and filing a tax return may be shared with the Bureau of Citizenship and Immigration Services (“BCIS,” formerly known as the INS). Section 6103 of the Code provides that any information shared with the IRS is confidential and may not be shared with other agencies. It appears that the IRS is not currently in the practice of sharing information with the BCIS or with the Social Security Administration. Of course, there is always a risk that the laws may change and that in the future the information may be used by the BCIS to find undocumented individuals. However, there is also the possibility that the laws will change favorably to undocumented individuals, offering them a way to become documented. It is also quite possible that under the new laws, if and when these new laws are passed, undocumented workers who have been paying taxes and filing tax returns with the use of an ITIN might be seen in a better light or might have to pay less in fines than those who have not done so.
The due date for filing a tax return for the 2006 year is Monday, April 16, 2007. If you have any questions about your tax return, you should seek advice early enough to allow some time to prepare the return. Remember that tax professionals and non-profit organizations who offer low-cost assistance with tax preparation are very busy during this time of the year and may not be able to help you if you wait until the last minute.
This article is intended to be used for general information and not for individual advice. For information on how the laws apply to your particular situation, speak to an attorney or other professional.