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Social Security and Taxpayer ID Requirements for Aliens
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Social Security and Taxpayer ID Requirements for Aliens By Stanley Mailman and Stephen Yale-Loehr* Foreign clients often ask their immigration lawyers: "How can I pay taxes when I’m here illegally and can’t get a social security card?" On the same basis, some employers who know they have hired an unauthorized alien who lacks a social security number (SSN) violate U.S. tax and other laws by paying off the books and failing to comply with the W-2 requirements. They may not realize that the Social Security Administration (SSA) will issue an individual taxpayer identification number (ITIN) in this situation. This is only one instance of widespread misinformation about SSNs and ITINs as they apply to aliens. Many aliens incorrectly think they need a social security card for most purposes. For example, they do not need a social security card to prove their eligibility for work. In fact, no one has to present a social security card for that purpose, as other documents will do as well. And the knowing use of a false SSN or ITIN is unlawful. INA § 274C, 8 U.S.C. § 1324c. Similarly, aliens in lawful status do not need an SSN to conduct business with a financial institution. SSA Publication No. 05-10096, Lawfully Admitted Aliens--When You Need a Social Security Number and When You Don’t, <http://www.ssa.gov/pubs/10096.html> (visited on Mar. 26, 1999). No one needs an SSN or ITIN to register for school, participate in group health insurance coverage, apply for school lunch programs, or apply for federal housing. Id. Federal law forbids the use of SSNs by states to issue nondriver identification cards. Id. And many states, including New York, allow people to obtain a driver’s license without an SSN if they obtain a letter from the SSA saying that they cannot obtain an SSN. Because of the growing use of fraudulent SSNs, the SSA has cracked down on issuing SSNs to aliens. Aliens who do not qualify for SSNs can now receive ITINs instead. This article summarizes SSNs and ITINs for immigration purposes. See generally 1 Charles Gordon, Stanley Mailman & Stephen Yale-Loehr, Immigration Law and Procedure § 6.07[2] (rev. ed. 1999). Social Security Numbers As background, the SSA has comprehensive regulations concerning SSNs and ITINs at 20 C.F.R. Part 422. The SSA maintains a record of the earnings reported for each individual based on SSNs. 20 C.F.R. § 422.103(a). As discussed above, the SSA will sometimes authorize SSNs for nonwork purposes. Such SSNs are tracked, and if earnings are reported to the SSA on a nonwork SSN, the SSA will inform the Internal Revenue Service (IRS). 20 C.F.R. § 422.104(c). Generally, an alien may obtain an SSN in three instances: (1) the alien is a permanent resident or has a legal status permitting employment in the United States; (2) the alien lacks such status but has a valid nonwork purpose that requires an SSN; or (3) the alien resides in the United States, has no evidence of alien status, and needs the SSN by law as a condition for receiving a federally-funded benefit. In this last case the alien may receive an SSN limited to a nonwork purpose. 20 C.F.R. § 422.104(a). The SSA has said that it will not generally assign SSNs to aliens in the United States who are not authorized to work. Letter from Sandy Crank, Associate Commissioner, Office of Program Benefits Policy, Social Security Administration, to Howard Gordon, American Immigration Lawyers Association (Feb. 13, 1996). As mentioned, however, SSA regulations allow aliens to gain an SSN for nonwork purposes. Needing an SSN for a tax reason is no longer a valid nonwork purpose, since the IRS instituted ITINs in 1996. A person may apply for an SSN by completing Form SS-5, Application for a Social Security Number Card, at any SSA office. The SSA requires certain evidence pertaining to age, U.S. citizenship or alien status, and true identity before it will issue an SSN. 63 Fed. Reg. 56,552 (Oct. 22, 1998) (to be codified at 20 C.F.R. § 422.107). The SSA will accept the following items as proof of age: a birth certificate, a religious record showing age or date of birth, a hospital record of birth, or a passport. An applicant who is a U.S.-born citizen may present a birth certificate showing a U.S. place of birth. A foreign-born U.S. citizen may present the following items, among others, as proof of citizenship: a certificate of naturalization, a certificate of citizenship, a U.S. passport, a U.S. citizen identification card issued by the Immigration and Naturalization Service (INS), or a consular report of birth. If the SSN applicant is an alien, the SSA will accept a current document issued by the INS, such as an I-94 card. If the document does not provide authorization to work, the SSA will not assign an SSN unless the alien presents a valid nonwork purpose. To prove identity, the SSA will accept a driver’s license, identity card, school record, medical record, marriage record, passport, INS document, or other documentation. The SSA prefers the document to contain the applicant’s signature so that it may be compared to the one on the application for the SSN. The SSA will presume that the alien has permission to work if the alien presents an I-94 card evidencing a classification that permits work. 63 Fed. Reg. 56,552 (Oct. 22, 1998) (to be codified at 20 C.F.R. § 422.105). An alien who does not have an I-94 card or whose I-94 card does not reflect a work-authorized classification may still be issued an SSN card valid for work purposes. In that case, the alien must submit an INS document authorizing work. Id. An employment authorization document (EAD) satisfies this requirement. Regulations issued in 1998 authorize the SSA to assign SSNs to an alien who requests one as part of the immigrant visa process. See generally 63 Fed. Reg. 56,552 (Oct. 22, 1998). One transaction with the INS for both visa and SSN purposes eliminates the need for the alien to contact the SSA. The SSA gains the alien’s data from the Department of State (DOS) or the INS as part of the green card process. 63 Fed. Reg. 56,552 (Oct. 22, 1998) (to be codified at 20 C.F.R. § 422.103). The SSA will use INS and DOS data to establish age, identity, and the alien’s lawful alien status or authority to work. The DOS and INS are modifying their forms to collect this information. The SSA will send the social security card to the alien at the address the alien provides to the DOS or INS. If the alien is a refugee without a personal mailing address, the SSA will send the card to the sponsoring agency. An alien who requests a social security number through the visa process will not need a personal interview for an SSN. 63 Fed. Reg. 56,522 (Oct. 22, 1998) (to be codified at 20 C.F.R. § 422.107(a)). This new method, part of the "federal reinventing government effort," seeks to eliminate the use of counterfeit documents to obtain an SSN. Until the 1998 regulations, SSA employees had to be familiar with a variety of INS documents. The potential for SSA employees to inadvertently accept inappropriate or counterfeit documents as evidence of legal or work-authorized status should be lessened by the INS transmitting enumeration information directly to the SSA. This will improve the integrity of the SSN assignment process. If an alien needs a social security number for a nonwork purpose, the SSA will annotate the alien’s social security records and is supposed to notify the INS if subsequent employment income is posted to that number. 20 C.F.R. § 422.104(c). At one time an undocumented alien who did not have an SSN could file an income tax return and write "SSA 205(c)" in the spaces for social security numbers. The IRS has stated that it will no longer accept "SSA 205(c)" on tax returns, however. IRS Information Sheet, Individual Taxpayer Identification Number, available on the Internet at <http://www.irs.ustreas.gov/prod/ind_info/itin.html> (visited Mar. 28, 1999). Individual Taxpayer Identification Numbers On July 1, 1996, the IRS began assigning individual taxpayer identification numbers (ITINs) to aliens who are otherwise ineligible for SSNs but who need taxpayer identification numbers for tax purposes. See generally 61 Fed. Reg. 26,788 (May 29, 1996). An ITIN is a tax processing number for certain nonresident and resident aliens, their spouses, and dependents. It should be used only for income tax purposes. ITINs do not entitle aliens to social security benefits or the earned income tax credit, create any inferences regarding aliens’ immigration statuses, or give aliens a right to work in the United States. IRS Information Sheet, Individual Taxpayer Identification Number, available on the Internet at <http://www.irs.ustreas.gov/prod/ind_info/itin.html> (visited Mar. 28, 1999). An ITIN takes the form xxx-xx-xxxx but begins with a "9." An alien applies for an ITIN on IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. The alien must submit at least two identify documents, such as a passport, foreign voter registration card, birth or marriage certificate, or INS documents. One of the documents should contain a recent photograph. IRS Tax Topic 857, Individual Taxpayer Identification Number-Form W-7, available on the Internet at <http://www.irs.ustreas.gov/prod/tax_edu/teletax/tc857.html> (visited Mar. 28, 1999). Documentation submitted with applications for ITINs on behalf of dependents must establish that the dependent lives in the United States, Mexico, or Canada. The W-7 form may be obtained from an IRS office, a U.S. consular office abroad, or the IRS website <http://www.irs.gov>. Conclusion The recent efforts by the SSA to limit issuance of SSNs to only aliens who are authorized to work are admirable. Yet the use of counterfeit SSNs continues to surge, as indicated by recent news articles. See, e.g., Bill Wallace, Despite INS, Phony Documents Flood State, U.S., San Francisco Chronicle, May 3, 1999, at A17. The problem has prompted some in Congress to propose making SSNs more counterfeit-resistant. The SSA resists this idea, both because of the $2.5 billion cost to replace current SSNs and because the underlying documents used to obtain a SSN, such as a birth certificate, can themselves be counterfeited. 70 Interpreter Releases 865 (July 2, 1993). Until Congress resolves this policy dilemma, aliens and their employers will have to sort out the complexities involving work SSNs, nonwork SSNs, and ITINs. _________ bio info: * Stanley Mailman and Steve Yale-Loehr are co-authors of Immigration Law and Procedure, published by Matthew Bender & Company (http://www.bender.com). Mr. Mailman is counsel to Satterlee Stephens Burke & Burke in New York City. He can be reached at smailman@compuserve.com. Mr. Yale-Loehr is of counsel at Miller Mayer (http://www.millermayer.com) in Ithaca, New York, and teaches immigration law at Cornell Law School. He can be reached at syl@millermayer.com. The authors thank Rachel Valente, a research assistant at True, Walsh & Miller, for her help on this article. A slightly different version of this article originally appeared in the May 21, 1999 issue of the New York Law Journal. Copyright © 1999 the New York Law Publishing Company. The authors thank the Journal for permission to reprint this article.
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