Could ‘Dreamers’ Be Made to Pay Restitution and Back Taxes for Amnesty?

Any discussion of granting amnesty to the so-called dreamers, beneficiaries of the Development, Relief, and Education for Alien Minors (DREAM) Act, should include a requirement that they come clean about having used a fraudulent or stolen Social Security number and pay a penalty to go into a restitution fund to compensate victims of Social Security fraud, says one immigration expert.

Jessica Vaughan, director of policy studies for the Center for Immigration Studies, proposed such a plan to the Senate Judiciary Committee in her written testimony on Tuesday, saying people applying for a Deferred Action for Childhood Arrivals (DACA) amnesty should have to disclose misuse of Social Security numbers “so that the system can be purged and corrected, and so that the true number holders can be informed.”

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“It would also be appropriate to impose an additional fine on the many DACA recipients who worked illegally before obtaining DACA status and improperly used false identity information,” she wrote. “The fines could be used to establish a restitution fund for the victims.”

It’s estimated that 70 percent of people working illegally in the U.S. are using a fake or stolen Social Security number, many of them purchased from vendors.

In an indication of how widespread the practice of using stolen or fraudulent identification is in some parts of the country, a California state senator testified before a state Senate committee in February, saying that half of his family is in the country illegally and using false documents to work. The state senator said that most immigrants in the state do the same. He was not confessing but defending the felony violations, saying that using stolen Social Security numbers and other fraudulent identification documents should not be offenses that would cause someone to be deported.

Social Security fraud is not a victimless crime. And ordinary Americans often are not aware that someone else is using their Social Security card to file a tax return, or apply for benefits. The IRS, says Vaughan, does not typically notify a taxpayer if the agency gets a second tax return filed using the same Social Security number, or the same Social Security number on W-2s but with another kind of number, called an ITIN, used on the return itself.

The IRS estimated that it paid out $5.8 billion in fraudulent tax refunds in 2013, due to identity theft, and the Treasury Department has reported that a whopping 8 million Social Security numbers have been compromised.

“This has the potential to screw up the Social Security system at some point,” said Vaughan, noting that the numbers stolen are often numbers that haven’t yet been given out.

Americans whose Social Security numbers have been compromised sometimes don’t find out for many years, until they apply for Social Security benefits, for example. And then, the cost of sorting out who stole their identity and getting it back is usually born by them, with little help from the Social Security Administration.

“It’s a real hassle, and for some people, it causes them financial harm,” says Vaughan.

Illegal immigrants in their 20s and 30s who have been granted two-year work permits under DACA in most cases either worked off the books, and evaded paying taxes, or used fraudulent or stolen identification in order to work.

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Any bill that gives them legal status in the country, and a path to citizenship, should make them come clean about this, says Vaughan.

“They should have to disclose if they ever used a Social Security number in the past,” she told LifeZette this week. “You make them disclose it, that they did that. And if they did, you make them pay an extra penalty.”

There is some precedent for such a penalty. Illegal immigrants who were granted amnesty in the 1990s under Section 245(i) of the Immigration Control and Reform Act, one of two rolling amnesties of the 1990s, were made to pay a $1,000 penalty in addition to processing fees.

Congress, said, Vaughan, should also be looking to require that DACA recipients pay back taxes before being given a crack at amnesty, though she acknowledges that this would be difficult to enforce as the IRS would have a difficult time determining the wages of someone who never filed taxes.

(photo credit, homepage and article images: Molly Adams, Flickr)