Pay taxes in anticipation of immigration reform

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UNITED STATES, New York : NEW YORK, NY – JUNE 14: Immigration reform advocates stage a demonstration, organized by the New York Immigration Coalition, outside a detention facility run by Immigration and Customs Enforcement (ICE) on June 14, 2013 in New York City. Demonstrators staged the event ahead of Fathers’ Day to draw attention to the thousands of undocumented immigrant fathers deported by ICE and separated from their families in the United States. John Moore/Getty Images/AFP

While 11 million undocumented immigrants are nervously anticipating the immigration reform bill pending in the US Congress, the government is happily anticipating the addition of 11 million new taxpayers.

A study by the non-partisan Congressional Budget Office (CBO) projects that the passage of the bill would reduce the US deficit by an estimated $200 billion in the first 10 years and another $700 billion in the second decade.

The CBO study indicates that with 11 million new taxpayers, the United States could substantially reduce its budget deficit in the next 20 years after the law is implemented.

An expected stipulation in the immigration reform bill is the requirement for immigrants to pay back taxes before being allowed to acquire permanent legal status.

Therefore, it would be wise for affected immigrants to start filing returns and paying the corresponding taxes, for past years and in tax years to come. You do not want to be caught in a situation where your tax liability reaches an insurmountable amount that is too high to pay because of added interests and penalties (as high as 25 percent) to the principal tax.

In addition to the interests, the Internal Revenue Service (IRS) imposes two types of penalties: (a) penalty for failure to file a tax return and (2) penalty for failure to pay tax when due. Not being able to pay your tax liability when it is time to do so could hinder your path to immigration legalization.

If you are an immigrant without legal status and you had taxable income for past years but did not file tax returns, you should not worry about coming out in the open and correcting the situation.  It is not too late to do so.

I have had clients who did not file their returns for five to six years, and we put them in compliance without a problem.  There is no reason to be afraid—all financial and tax information provided to the IRS are in general are not shared with other governmental agencies like the Department of Homeland Security or any law enforcement agency.  The majority of hardworking and law-abiding immigrants have no cause for concern.

Be ahead of the game.  Before you know it, the new immigration law is before us. The worst situation you may find yourself in is when you are not ready to proceed.

 

Edgardo M. Lopez, is an Attorney at Law and founder of Tax Release Inc., a tax resolution company. He is admitted to the State Bar of California, the United States Tax Court and a member of the American Society of Tax Problem Solvers. Facebook.com/TheTaxAttorney or email:  Ed@taxreleaseinc.com. Toll free (855) 829 4771. Rated A+ by the Better Business Bureau.

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  • gatdila

    Paging the Inquirer ombudsman – Why is this here? This is not news rather an advertising for tax services.

    • kanoy

      ACTUALLY THIS IS RP NEWS–ITS A STORY ABOUT WHY THE RP REMAINS POOR–ITS A STORY ABOUT WHY THE RP CAN NOT FIX ITS DILAPIDATED INFRASTRUCTURE-ITS A STORY ABOUT WHY THE RP HAS NO NAVY NO AIR FORCE—-ITS A STORY ABOUT HOW THE OFW PROGRAM IS THE REASON AND CAUSE OF IT ALL–THE OFW PROGRAM IS ROBBING THE RP OF TRILLIONS OF $$$$$$$$$$$

      • gatdila

        Sorry to disagree. It is not the brain drain but rather selfishness the biggest reason why Filipinos remain poor. Because we are not ambitious people aspiring the higher education and skill enablers in order to provide the best services for our communities.

        We only think and do for ourselves — most times shoving and pushing off others ala talangka. We call our selves Christians but not heeding what Christ preached about loving neighbors and helping those in need.

        People leave their country only because of better opportunities somewhere else. Look at Singapore where citizens stay because of the prosperity and opportunities in there.

      • Guest

        hey, don’t shed a sweat about him, look at all his post, they all are commie post. he is a wanna be american. he could be an illegal alien for all we know and shoveling sh¡ts in the mainland.

  • regd

    What the….???? Anong relevance nito sa atin sa Pinas? Title is misleading! I wasted my precious time clicking on this useless stuff!

    • Billy Reyes

      The title doesn’t say its in the Philippines. Its actually very informative, this is very typical Filipino mentality you start making comment even without reading it properly & understand it.

    • kanoy

      IF YOUR TIME WAS PRECIOUS YOU WOULD BE AT WORK–NOT BLOGGING

  • Commentator

    Are illegal immigrants allowed to pay taxes? If they pay they will be caught and maybe deported.

    • Billy Reyes

      the article says “Not being able to pay your tax liability when it is time to do so could hinder your path to immigration legalization”
      That means you either pay or not but if you apply for citizenship you will get caught eventually in the end. That’s why the article suggest that before the “Immigration Reform Law” took place it better to go out now in the open & pay tax return to avoid penalty & deportation.

    • kanoy

      ALL OF NR 65 YRS LIVING IN USA I HAVE SEEN ILLEGALS PAY TAXES SOME EVEN PAY PAYROLL TAXES WITH DEAD BABY SSI CARD BUT AS FOR THE MAJORITY WE ARE TALKING CAPITALISTIC USA WHERE TAX IS KING–ILLEGALS PAY TONS OF TAXES

      Tax his land, tax his wage,
      Tax his bed in which he lays.
      Tax his tractor, tax his mule,
      Teach him taxes is the rule.
      Tax his cow, tax his goat,
      Tax his pants, tax his coat.
      Tax his ties, tax his shirts,
      Tax his work, tax his dirt.
      Tax his chew, tax his smoke,
      Teach him taxes are no joke.
      Tax his car, tax his grass,
      Tax the roads he must pass.
      Tax his food, tax his drink,
      Tax him if he tries to think.
      Tax his sodas, tax his beers,
      If he cries, tax his tears.
      Tax his bills, tax his gas,
      Tax his notes, tax his cash.
      Tax him good and let him know
      That after taxes, he has no dough.
      If he hollers, tax him more,
      Tax him until he’s good and sore.
      Tax his coffin, tax his grave,
      Tax the sod in which he lays.
      Put these words upon his tomb,
      “Taxes drove me to my doom!”
      And when he’s gone, we won’t relax,
      We’ll still be after the inheritance tax.

    • gatdila

      No cause for concern according to the peddler/reporter of this advertising piece if you buy his tax services..

    • md’c™

      there is nothing like allowed or not allowed in filing taxes. IRS wants everyone, regardless of who you are, to file. Its all about money and audits. ICE has no information about a taxpayer’s info since its not a shared datawarehouse with homeland security. it will be a battle with congress to share tax payers info with dept of homeland security. prism does not even have access to it.

      And because of IRS love of money, they have a humangous unaccounted pile billions of dollars in the general accounts from some fake ss accounts or duplicate ss account, typically from illegal undocumented hispanic nationals who possibly paid large sum to get a fake ss number from some fixers. And use those ss to file their very own taxes. Those tax report will hit the real owners and give them more ss collections when they retire. They may already be dead, have risen during the tax season, for all they care.

  • md’c™

    For everyone below – Yes, everybody in the USA can pay taxes. There are two types
    of SS numbers issued. One from the SS administration for all US citizens and permanent residents. The other is called a TIN, issued to any immigrant for tax purposes alone, although it is exactly the same as any social security number. The same TIN will be your SS number once legalized. A TIN can also be used to open bank accounts. You can not open a bank account without a SS number or a TIN number.

    And also, yes, the IRS does not share tax records with ICE so its safe to file using your TIN. For many years, my best friend from college at CAL never failed filing taxes and has been filing his taxes using a TIN number and thank goodness he has hope this time. Now, very soon he can come with me to visit his parents here in our pop’s land.

    • wafu

      If he is working, why is he using TIN? TIN or ITIN are supposedly only for people who aren’t qualified for SSN. If you work, you must have an SSN

      • md’c™

        If they work, they are illegally working. but, can still file taxes since the worker has income. IRS does not care since its not in the questionnaire. There are 3 types of illegal immigrants, one an undocumented (came from the border no docs), the other with an expired H1 or working visa or Student visa who has a legal SS number the moment they arrive, and the 3rd a visitor visa who overstayed. The undocumented and visitor can apply for TIN so they can use it for whatever it is for. Others use a fake ss number and that is not good for them.

        Employers knowingly hire illegals, do not deduct ss and other deductions from the worker. Illegal workers are paid cash. The illegal worker who intends to stay in the USA, typically declare their income and pay their income taxes towards year end. they may not tell the IRS what their income really is, but they do pay and that is good for them specially this time when immigration overhaul may happen.

        I had a house by the mission district in SF, mostly hispanics neighborhoods and came to have a lot of hispanic friends. I did help many of them do their taxes (simple tax calculation) and I found alot of them making good money during the time I was there. But they have no idea how to fill out forms more so, do it themselves. Its quite easy since everything is automated using TurboTax application. I charged $50 to do their taxes, and it was fine with them, and it helped me and helps them be good future citizens.

      • wafu

        oh an illegal immigrant, that makes sense

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