Another False Immigration Amnesty Claim: Tax Edition

Fox News trumpeted the false claim that immigrants who receive provisional status under the immigration reform proposal would get a “tax amnesty” because the bill does not mandate they pay back taxes. In fact, the bill requires that immigrants -- at least three quarters of who already pay payroll taxes -- pay a tax liability before they can qualify for provisional legal status and ensure they pay taxes before they can renew their legal status.

In a op-ed, Dan Stein, president of the anti-immigration Federation for American Immigration Reform, accused the bipartisan group of senators behind the bill of giving a “tax amnesty” to undocumented immigrants because the bill does not contain language addressing “back taxes” and does not explicitly explain how taxes will be assessed. He wrote that “taxes assessed” are different from “taxes owed” and there is no proof that the proposal would require immigrants to pay anything:

While this sounds good at first blush, “taxes assessed” is not the same as “taxes owed.”   A tax assessment occurs when the IRS officially records that a person owes money because an individual files a tax return, or the IRS audits an individual - whether or not he has filed a return - and records how much the person owes.

The bill requires aliens to only pay taxes that the IRS has assessed at the time they apply for [ “registered provisional immigrant” ] RPI status.

If the IRS had no knowledge that the individual had been working here, there would obviously be no tax liability assessed and the alien has nothing to satisfy for the purpose of getting RPI status.

This claim has also received considerable attention from other nativist anti-immigrant groups.

In fact, immigrants who apply for provisional legal status would have to pay taxes. The bill states that immigrants may not receive provisional status until any federal tax liability is satisfied in accordance with regulations to be established by the Secretary of the Treasury. This gives the IRS the discretion to decide how a tax liability will be administered to immigrants seeking the legal status. If an immigrant is granted legal status they would still be required to pay taxes during that period as well.  

Moreover, throughout the process, applicants would be required to renew their RPI status, each time paying a fine and proving they paid any back taxes since achieving the previous status. According to an analysis of the bill by the National Immigration Law Center:

After 6 years of having RPI status, the person to whom it was granted must apply to renew it. After 10 years in RPI status, the person would be eligible to apply for LPR (or “green card” ) status. An additional 3 years in LPR status is required before individuals may apply for U.S. citizenship.

  • Fees and fines. Fees paid by the applicant must cover the cost of the application process, and fines would be assessed as follows: $1000 at RPI application ($500 may be paid when filing the initial application and $500 at renewal), and $1000 at adjustment to a green card.
  • Back taxes. A person with RPI status must also pay any back taxes owed since he or she was granted the status.

Even immigrants who have not been paid “on the books” would likely use their work history as proof of their residency in the United States before the December 31, 2011 cutoff date, thereby giving the government proof of the amount in taxes they would owe. As Louis DeSipio, a professor of political science and Chicano/Latino studies at the University of California-Irvine, explained, workers who provide work history could “help government officials determine whether appropriate [taxes] have been paid” :

“If it's obvious in those employment records that they have not been paying taxes, I think in that case they [The IRS] would make some effort to collect those funds,” DeSipio said.

The number of immigrants who would be responsible for paying taxes would be relatively low because many immigrants are already paying billions of dollars in taxes. Stephen Goss, chief actuary of Social Security, has said that about three-quarters of all undocumented immigrants paid payroll taxes. A study by the Institute for Taxation and Economic Policy found that, in 2010, immigrant households paid $11.2 billion in state and local taxes. However, passing immigration reform is expected to increase tax revenues overall, as legalization would help boost newly documented immigrants' individual earnings.

This is the second misleading op-ed Stein has written since discussions around immigration reform began to emerge earlier this year.