Many undocumented workers pay, hoping to gain citizenship

AMY BALDWIN Among those lining up inside Latin & American Services for help filing their taxes ahead of Tuesday's deadline: illegal workers.

Like others, undocumented workers want their refunds, said Eneida Orama, owner of the business nestled among Latino shops and eateries in east Charlotte. But mostly her clients, Orama said, file taxes to stay right with the law.

Many illegal immigrants hope filing taxes regularly will help them to become legal citizens if there is a future amnesty.

"The majority look at it as, `If I do my taxes ... this will help me get legal standing in the U.S.,' " said Orama, 41, who grew up in New Jersey but whose family is from Puerto Rico.

For the estimated 7 million undocumented workers in the U.S., there's irony in the annual task of settling up with Uncle Sam. The Department of Homeland Security's stance is that it's illegal for them to be here. At the same time, the Internal Revenue Service reminds these workers it's illegal to not pay taxes on their wages. With estimates having illegal workers accounting for one out of every 20 workers in the U.S., there's billions of dollars at stake.

Among the tax filers one recent afternoon at Latin & American Services, opened in 2001 as illegal workers flooded into the Carolinas, was Jose Garcia, his wife and two small children. He and his wife came to the U.S. illegally from Honduras four years ago, he says, but he's filed his taxes every year.

"It's like an obligation," Garcia, 25, said of filing taxes. "And it shows we've been here for so long and that I have complied with the law."

IRS Commissioner Mark Everson reminded Congress of that fact in testimony last year. "If someone is working without authorization in this country, he (or) she is not absolved of tax liability," he said.

The IRS and individual state departments of revenue have taken extra steps to make sure they get their cut from undocumented workers' pay, though none knows how many actually file their taxes. New this tax season, the N.C. Department of Revenue has tax-filing help in Spanish on its Web site,

In 1996, the IRS began issuing individual taxpayer identification numbers, called ITINs. Undocumented workers are to use these nine-digit numbers, which start with "9," in place of Social Security numbers when filing their taxes. So far, the IRS has issued nearly 11 million ITINs. While foreign nationals with work privileges and tax-filing requirements in the U.S. can also get ITINs, most of the numbers are believed to have gone to undocumented workers and their dependents.

The IRS issued 1.5 million ITINs in 2006, a 30 percent increase from the previous year.

Between 1996 and 2003, the most recent data available from the IRS, the total tax liability from ITIN filings came to almost $50 billion.

The IRS says it doesn't share data on who files taxes with the Department of Homeland Security. Still, undocumented workers filing taxes at Latin & American Services were wary of talking about it. In the small office where staffers sit behind glass and the air smells of overly sweet air freshener, there's almost a visible push-pull of wanting to do the right thing but of being scared of getting busted for it, too.

Some advocates of tighter immigration laws are skeptical that illegal workers pay all the taxes they owe. Ron Woodard, head of N.C. Listen in Cary, reasoned that illegal immigrants -- even those who pay taxes -- cost the state and the nation money. In part, he said, that's because the jobs they perform are low-paying.

Indeed, researchers last year at UNC Chapel Hill's Kenan Institute released a report about the economic impact of North Carolina's rapidly growing Hispanic community, half of whom it estimated are illegal. Researchers estimated that North Carolina spent $61 million more than it collected in taxes to provide Hispanics with key social services in 2004. That's an average of $102 for each of the 600,913 Hispanics that researchers estimated live in the state.

Garcia, who works in landscaping, said he expects his federal and state refunds this year come to about $800.

Garcia also said he knows that other illegal workers file them incorrectly -- claiming credits they aren't entitled to or putting down more dependents than they have to get a big refund. But he says he doesn't do that. He does his taxes and he does them right, he said.

And Orama said that's what she tells her clients to do. "We really encourage them to do the right thing."

-- Staff writer Rogelio Aranda contributed.

-- Amy Baldwin: 704-358-5179

Tax Tally

1 in 20

Estimated proportion of undocumented workers in the U.S. work force.

11 million

Individual Taxpayer Identification Numbers issued since 1996. Most are believed to be held by illegal workers.

1.5 million

Number of ITINs issued in 2006, up 30 percent from the previous year.

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