Jonah Patel
The use of taxpayer money to support non-citizens is a highly debated topic, with legal, economic, and moral implications. In the United States, undocumented immigrants contribute significantly to the economy and public services through their tax payments, with an estimated $96.7 billion in taxes in 2022. They often face a harsher tax code, paying taxes towards programs from which they are excluded due to their immigration status. The right to challenge how tax money is spent is a complex issue, with legal precedents such as Flast v. Cohen, where the court recognized the nexus between tax collection and congressional action. The First Amendment also plays a role, with the concern that religious liberty could be impacted if the government uses its taxing powers to favor certain religions. Taxpayers have certain rights, including the right to know what they must do to comply with tax laws, to receive clear explanations, and to challenge IRS decisions.
| Characteristics | Values |
|---|---|
| Undocumented immigrants pay taxes | $96.7 billion in 2022; $89.8 billion in 2023 |
| Taxes paid by undocumented immigrants fund public services and government programs | $59.4 billion to the federal government and $37.3 billion to states and localities in 2022; $55.8 billion to the federal government and $33.9 billion to states and localities in 2023 |
| Undocumented immigrants face a harsher tax code than legal residents | Often pay taxes dedicated to funding programs from which they are barred from participating due to their immigration status |
| Taxpayer rights | Right to be informed, right to quality service, right to pay no more than the correct amount of tax, right to challenge the IRS's position, right to appeal an IRS decision, right to finality, right to privacy, right to confidentiality, right to retain representation, right to a fair and just tax system |
| Constitutional limitations on the use of taxes | Prohibition on Congress enacting laws "respecting an establishment of religion" |
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What You'll Learn
Undocumented immigrants pay taxes that fund programs they are barred from
Undocumented immigrants play a crucial role in the U.S. economy, contributing substantial tax revenue that supports public services and government programs. In 2023, undocumented immigrant households paid $89.8 billion in total taxes, including $33.9 billion in state and local taxes and $55.8 billion in federal taxes. This significant contribution becomes even more apparent when considering that approximately 4.9% of the U.S. workforce in 2023 was undocumented, with 89.4% of undocumented immigrants being of working age.
Undocumented immigrants face unique challenges when it comes to paying taxes. They often pay into programs from which they are barred from participating due to their immigration status. For example, in 2022, undocumented immigrants contributed $33.9 billion towards social insurance programs that they cannot access. This includes $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes. Additionally, they paid $15.1 billion in sales and excise taxes, $10.4 billion in property taxes, and $7 billion in personal and business income taxes.
The misalignment between U.S. immigration and taxation laws further complicates the situation. The IRS is focused on collecting all taxes owed, regardless of immigration status, while immigration enforcement officials prioritize unauthorized work prevention. This conflict has resulted in legislative inertia, leaving undocumented immigrants in a precarious position. Despite these challenges, many undocumented immigrants pay taxes, even without Social Security numbers, as they aspire to become citizens one day.
The tax contributions of undocumented immigrants have a significant impact on public revenue at all levels of government. Their exclusion from certain programs and tax credits, such as the federal Earned Income Tax Credit (EITC) and meaningful refunds, further emphasizes the complexities of their situation. Providing work authorization to undocumented immigrants could increase their tax contributions by $40.2 billion annually, benefiting both federal, state, and local governments.
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The right to pay no more than the correct amount of tax
The following paragraphs outline the right for taxpayers to pay no more than the correct amount of tax, as well as the broader context of non-citizen contributions to the US economy and tax system.
Undocumented immigrants play a crucial role in the US economy, contributing substantial tax revenue that supports public services and government programs. In 2023, undocumented immigrants paid $89.8 billion in total taxes, with $33.9 billion going to state and local taxes and $55.8 billion to federal taxes. This significant contribution becomes even more apparent when considering that 4.9% of the US workforce in 2023 was undocumented, and they made up 89.4% of the working-age population.
Despite their essential role, undocumented immigrants face a harsher tax code than legal residents. They often pay taxes towards programs from which they are barred from participating due to their immigration status. Additionally, undocumented immigrants and their citizen family members are ineligible for certain tax credits, such as the federal Earned Income Tax Credit (EITC) and the federal Child Tax Credit (CTC).
To ensure that all taxpayers, regardless of citizenship status, pay their fair share of taxes, the Internal Revenue Service (IRS) provides Individual Taxpayer Identification Numbers (ITINs). This system ensures that people, including undocumented immigrants, can comply with tax laws and make their contributions to the economy.
The IRS adopted a Taxpayer Bill of Rights in 2014, outlining ten fundamental rights for all taxpayers in their dealings with the IRS. One of these rights is the Right to Pay No More than the Correct Amount of Tax. This right empowers taxpayers to challenge the IRS's position, appeal decisions in an independent forum, and receive a refund if they have overpaid their taxes.
Taxpayers also have the right to receive clear and easily understandable communications from the IRS and to be spoken to in a way they can easily understand. They can request assistance from a Low-Income Taxpayer Clinic if needed. These rights ensure that taxpayers are informed, protected, and treated fairly throughout the tax process.
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The right to appeal an IRS decision
The use of taxpayer money to support non-citizens is a contentious issue, with undocumented immigrants playing a significant role in the US economy and contributing substantial tax revenue. While the debate continues, taxpayers have a set of fundamental rights when dealing with the IRS, including the right to appeal its decisions.
The IRS Independent Office of Appeals exists to resolve disputes without litigation, ensuring fairness and impartiality to both the government and taxpayers. This right to appeal is a crucial safeguard, allowing them to challenge the IRS's position and seek an independent review.
When considering an appeal, taxpayers should assess whether the IRS misinterpreted the law, misapplied the law due to a misunderstanding of facts, or took inappropriate collection action. If taxpayers believe the IRS's decision is based on incorrect facts, they should organise records or evidence to support their position.
To initiate an appeal, taxpayers should use Form 12203, Request for Appeals Review, or prepare a written statement. They must list the items they disagree with and the reasons for their disagreement. It is important to note that appeals should be mailed to the collection office that sent the collection action letter and not directly to any Appeals office location.
Additionally, taxpayers have the right to receive a written response from the Office of Appeals and, in most cases, the right to take their cases to court. They are also entitled to know the maximum time they have to challenge the IRS's position and the maximum time the IRS has to audit or collect taxes. These rights ensure that taxpayers can effectively exercise their right to appeal and seek an independent review of IRS decisions.
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The right to privacy and confidentiality
In terms of confidentiality, the same protection that applies to communications with an attorney also applies to certain communications with authorized practitioners before the IRS, such as certified public accountants. Taxpayers have the right to expect that their tax information will not be wrongfully used or disclosed by return preparers or other parties. If taxpayers believe their information has been compromised, they can contact the relevant authorities, who will take appropriate action and work to prevent fraudulent use of their information.
The IRS also has guidelines in place to ensure that its collection actions are no more intrusive than necessary. This includes considerations during a Collection Due Process hearing, where the Office of Appeals must balance the need for efficient tax collection with respect for taxpayers' privacy rights. The IRS is also restricted from contacting third parties, such as employers or banks, without providing reasonable notice in advance.
Overall, the right to privacy and confidentiality in the context of using taxpayer money to support non-citizens is a complex issue that involves a balance between the government's responsibilities and the rights of taxpayers. While there may be legal and ethical considerations to using taxpayer money for such purposes, individuals are entitled to certain protections and privacy rights under the Taxpayer Bill of Rights.
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The right to refuse to pay federal income taxes based on religious or moral beliefs
> "The tax system could not function if denominations were allowed to challenge the tax system because tax payments were spent in a manner that violates their religious belief."
In addition, the Religious Freedom Restoration Act ("RFRA") also does not afford a right to avoid payment of taxes for religious reasons.
While taxpayers have a range of rights, including the right to quality service, privacy, and confidentiality when dealing with the IRS, there is no explicit right to refuse payment of federal income taxes based on religious or moral beliefs.
Furthermore, undocumented immigrants contribute significantly to the US economy through their labor and tax contributions. In 2023, households led by undocumented immigrants paid $55.8 billion in federal taxes, and their mass deportation would have a catastrophic impact on the economy. Therefore, it is in the public interest to ensure that all individuals, regardless of citizenship status, contribute to the economy through their labor and taxes.
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Frequently asked questions
Undocumented immigrants contribute significantly to the US economy through their labour and tax contributions. In 2022, they paid $96.7 billion in US taxes, including $59.4 billion in federal taxes and $37.3 billion in state and local taxes.
Undocumented immigrants pay property taxes, either directly on their homes or indirectly through their monthly rent. They also pay income and payroll taxes through automatic withholding from their paychecks or by filing income tax returns using Individual Taxpayer Identification Numbers (ITINs).
No, undocumented immigrants are often ineligible for certain programs and benefits due to their immigration status. For example, they are ineligible for the federal Earned Income Tax Credit (EITC) and may face restrictions when claiming dependent credits.
