Trump Wants to Use the IRS to Track Down Immigrants. They May Stop Paying Taxes.

Undocumented immigrants contribute billions to Social Security and other programs. That money might fall off because of Trump’s crackdown.

(Composite / Photos: GettyImages / Shutterstock)

IMMIGRANTS IN THE COUNTRY ILLEGALLY paid nearly $100 billion in taxes in 2022, according to a report by the Institute on Taxation and Economic policy.

But that source of government revenue may soon taper off as the Trump administration pushes the Internal Revenue Service to help it accelerate its program of mass deportations.

The Washington Post reported Friday that the IRS rejected a request from Homeland Security to reveal the addresses of 700,000 people the agency suspects of being undocumented, an action that could violate taxpayer privacy laws. But the Post went on to report the new acting IRS commissioner Melanie Krause is (surprise) more amenable to complying with the request to turn over the taxpayer data of immigrants.

The result, experts say, is not just that tax data will be morphed into a cudgel for the immigration fights. People are also now becoming too scared to file their taxes. One immigration lawyer told me they suspect the number of people forgoing those filings will only rise as the Washington Post report hits Spanish-language media.

Tax professionals and immigration advocates in areas with large immigrant populations who spoke to The Bulwark said they are already feeling the effects. And it’s not just tax filings—it’s the shriveling of small businesses with ties to the community. In Nevada, which has the third-highest rate among states of mixed-status families—where at least one family member is undocumented—an employee at Toro Taxes in Las Vegas, where their clientele is 95 percent Latino, said overall business has dropped a stunning 25 percent from last year.

“Business is slow,” the employee who declined to give her name said, adding that even longtime customers have disappeared or said they won’t be filing taxes this year: “They’re saying they’re too scared.”

In Corona, Queens—where in 2016 I found that one in five residents was undocumented—Dejesus Tax Services has seen the same chill among its customer base, 80 percent of whom are Latino, as tax season heats up. The owner said an estimated 60 percent of Dejesus clients known to the company to be here illegally are not showing up to file taxes so far.

“Turnout has been very low,” Ramon DeJesus told The Bulwark. “At the beginning there was nobody, but now there is a trickle.”

“I have people that come here with a W2 for $120,000 with no papers, usually in construction, and this year a lot of them have been afraid to come in,” he said. “Even the streets around my office have been quiet.”

This dynamic has left immigrants in a desperate bind: fearful that they could be tracked down and deported if they file their taxes, but also mindful that they could get in trouble for not paying their taxes.

“I’m still going to file my taxes because anything tiny, even a parking ticket, could be detrimental to my possible citizenship in the future,” one temporary protected status holder told The Bulwark, speaking on condition of anonymity. “Even if I was scared, I would still file because not filing would be worse than them not having my information.”

---

THAT UNDOCUMENTED IMMIGRANTS PAY TAXES is not a widely known fact. But under the law, if you have reportable income, you have to pay, no matter your immigration status. And if you’re not here legally but hope to be able to change your status in the future, not paying taxes can create problems for residency or citizenship applications later on, while staying current on your tax obligations can be used to demonstrate civic responsibility to an immigration judge.

These payments are a huge benefit for U.S. citizens. Of those undocumented taxpayer funds, nearly $60 billion went to the federal government, the Institute on Taxation and Economic policy study found. Another $37 billion went to local and state governments. Undocumented people paid roughly $8,889 per person in 2022.

“In other words, for every 1 million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue,” the report stated.

Those taxes help prop up the nation’s Social Security system, which undocumented immigrants can’t even access when they turn 65. As Trump has gone about accelerating deportations, pro-immigrant advocates have warned that the follow-on effects will include the fraying of the social safety net as these payments disappear.

Americans for Tax Fairness, an advocacy organization that promotes progressive tax reform, is one of the groups shouting out those warnings. It is holding a Spanish-language briefing next week with labor leaders and Rep. Delia Ramirez (D-Illinois) on how, contrary to Trump’s rhetoric, undocumented immigrants are “not a drain on federal resources at all.”

“These are workers that are positively contributing to our communities—they’re our neighbors and coworkers who are contributing not just through their labor in critical industries like agriculture and construction, but they’re paying their taxes and don’t get benefits back,” Pablo Willis, the group’s communications director, told The Bulwark. “Meanwhile, Elon Musk’s entire business empire is based on federal subsidies, and Tesla didn’t pay taxes last year.”

It’s All About the Data

IMMIGRANTS WITHOUT SOCIAL SECURITY NUMBERS receive individual taxpayer identification numbers (ITIN) to facilitate their tax payments, which is why the IRS has records of their last known addresses and information about their families, employers, and earnings.

The Trump administration is after that data because they want to use it to search out people who may be in the country illegally. The pressure being brought to bear on the agency for the data is part of a larger effort to try to collect as much useful information as possible to help recalibrate the machinery of the government to accelerate deportations.

“The real danger is when they’re trying to access other databases,” Rep. Jimmy Gomez (D-Cal.) told The Bulwark. “A good example, tax information: Extremely sensitive, only certain people are supposed to have access to it, any unauthorized disclosure of that information, $5,000 fine or five years in jail. . . . I think what they’re actually after is the ITINs so they can go after undocumented immigrants; that’s why it’s so dangerous for them to have access to that information.”

The prospect that the IRS may comply with the Trump White House’s request has alarmed Democrats. Rep. Teresa Leger Fernández (D-N.M.) argued that doing so would violate privacy laws and lay the groundwork for future abuses.

“They give their address and it’s supposed to all be confidential,” she said. “It’s not just the undocumented that should be worried.”

---

FOR MANY, THE VERY IDEA THAT THE TRUMP administration would repurpose the logistics of paying taxes as a means to ramp up deportations demonstrates how little their deportation program is actually about tackling criminality.

“What criminal pays their taxes?” asked Mariana Castro, a DACA recipient.

She said that despite the swirling uncertainty of their legal fate, DACA recipients have to continue paying their taxes—and they do so with the full knowledge the government has their information.

“This is something when DACA first came out, undocumented people worried about signing up because the thought was, ‘What happens if we give them our information?’” she added. “Now, in Trump’s view, I’m a criminal when I have a cleaner criminal record than the president.”

In 2022, the Trump Organization was convicted of tax fraud and fined $1.6 million.

Lawyers who spoke to The Bulwark said there are reasons someone might not file taxes during a certain year—they could leave the country or die, for example. They don’t believe the goal of the administration’s tax information push is for the IRS to go after immigrants using audits, but for the administration to use the information the agency gives them to track down immigrants.

Matt Cameron, a Boston-based immigration lawyer, said whether immigrants use an ITIN or fake Social Security number, the money ultimately goes into the Social Security pot where it benefits everyone—just not undocumented people.

“It goes into Social Security to pay Trump-supporters’ retirement,” he said.

One Last Thing

CNN is out with a new report on how Trump’s immigration crackdown is setting up “potential labor shortages, weaker economic growth and higher inflation.”

With signs of legal immigration slowing and the expectation that it will decline throughout Trump’s second term, our newly hostile environment could result in worker shortages in crucial industries. To give one example of the seriousness of the situation: Our aging nation is in dire need of health care workers for the elderly. Older Americans will not be well served by an absence at their bedsides when they need help.

So there’s that. Happy Wednesday!