IRS Information to Target Illegal Workers, Employers: Good or Bad Idea?
Jim Kouri, CPP
September 03, 2006
To lawfully work in the United States, individuals must provide identification and evidence of work authorization to their employers. Individuals who are not US citizens must have authorization to work from the Department of Homeland Security.
Yet individuals without these required authorizations can gain employment using fraudulent documents containing fictitious information or information that belongs to someone else or by being hired by an employer who does not follow the law.
In prior Government Accounting Office work on these issues, they reported that Social Security Administration and Internal Revenue Service data can be useful for identity and employment eligibility verification as well as to facilitate more effective worksite enforcement. However, the use of these data has drawbacks since they contain some erroneous information and information about hundreds of thousands or even millions of US citizens and work-authorized aliens.
Because the confidentiality of tax data is considered crucial to voluntary taxpayer compliance, IRS is restricted under Section 6103 of the Internal Revenue Code from sharing taxpayer information with third parties except in very limited circumstances. Currently, IRS is not authorized to share taxpayers' information for worksite enforcement efforts. However, SSA is authorized to provide DHS a specific data file that contains information compiled from employer earnings reports and SSA data.
The House and the Senate are considering legislation to reform immigration laws and strengthen enforcement. As part of these deliberations, there are proposals to share earnings data with DHS for worksite enforcement. To better understand how such data could be used, the Subcommittees on Social Security and on Oversight of the House Ways and Means Committee requested that GAO analysts assess DHS's use of the data it already receives from SSA and determine what changes or improvements could be made to effectively use earnings data for enforcement.
In summary, sharing earnings data has the potential to assist DHS in detecting unauthorized work and enforcing immigration laws. However, DHS has not yet fully determined how it would use earnings data in a program of general worksite enforcement.
As policymakers consider providing DHS additional earnings data, they should also consider how DHS would use these data and how DHS would safeguard taxpayer information. To address the subcommittees' request, analysts describe the earnings data that might be useful to DHS in its worksite enforcement efforts, highlighting both the benefits and the limitations associated with each source of data.
Yet individuals without these required authorizations can gain employment using fraudulent documents containing fictitious information or information that belongs to someone else or by being hired by an employer who does not follow the law.
In prior Government Accounting Office work on these issues, they reported that Social Security Administration and Internal Revenue Service data can be useful for identity and employment eligibility verification as well as to facilitate more effective worksite enforcement. However, the use of these data has drawbacks since they contain some erroneous information and information about hundreds of thousands or even millions of US citizens and work-authorized aliens.
Because the confidentiality of tax data is considered crucial to voluntary taxpayer compliance, IRS is restricted under Section 6103 of the Internal Revenue Code from sharing taxpayer information with third parties except in very limited circumstances. Currently, IRS is not authorized to share taxpayers' information for worksite enforcement efforts. However, SSA is authorized to provide DHS a specific data file that contains information compiled from employer earnings reports and SSA data.
The House and the Senate are considering legislation to reform immigration laws and strengthen enforcement. As part of these deliberations, there are proposals to share earnings data with DHS for worksite enforcement. To better understand how such data could be used, the Subcommittees on Social Security and on Oversight of the House Ways and Means Committee requested that GAO analysts assess DHS's use of the data it already receives from SSA and determine what changes or improvements could be made to effectively use earnings data for enforcement.
In summary, sharing earnings data has the potential to assist DHS in detecting unauthorized work and enforcing immigration laws. However, DHS has not yet fully determined how it would use earnings data in a program of general worksite enforcement.
As policymakers consider providing DHS additional earnings data, they should also consider how DHS would use these data and how DHS would safeguard taxpayer information. To address the subcommittees' request, analysts describe the earnings data that might be useful to DHS in its worksite enforcement efforts, highlighting both the benefits and the limitations associated with each source of data.
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