IRS to share undocumented immigrants' tax data with ICE, raising concerns in California
The IRS's agreement to share taxpayer information with ICE has alarmed undocumented immigrants in California, potentially impacting billions in state tax revenue and eroding trust in the tax system.
A recent memorandum between the U.S. Treasury Department and the Department of Homeland Security outlines a plan for the Internal Revenue Service (IRS) to share taxpayer information with Immigration and Customs Enforcement (ICE) for "nontax criminal enforcement."
The agreement has been disclosed in court filings and is causing widespread concern among immigrant communities, particularly in California.
Undocumented immigrants and tax compliance: How ITIN plays a key role
The Individual Taxpayer Identification Number (ITIN) is a very common tool that may undocumented workers in California use to pay taxes, because they don't have a Social Security Number (SSN).
This method has been accepted for many years. However, now that the Trump administration announced that the IRS would share key information with ICE, many immigrants are scared to pay their taxes out of fear of being targeted.
California’s undocumented immigrants as key taxpayers
Undocumented immigrants make up an important portion of California's workforce. In 2022, undocumented taxpayers contributed approximately $8.5 billion in state and local taxes.
This new measure could also negatively impact small businesses where the majority of the work force are undocumented immigrants. It is important to highlight their impact in California's economy.
