"Because it's against the law to reveal that information. IRS and SS are forbidden to give that information to ANYBODY"
It may be true that the IRS and SSA are forbidden to give that information to anybody ELSE, but they do share information between their two agencies, and crosscheck tax returns with valid SS numbers.
And what would be wrong with investigating those that are illegal? Sounds like something you would want to do automatically. Otherwise you have an enormously corrupt SS system -- on second thought, never mind.
And.....how much good does that do? Do you really think these people hang around on long term jobs? Most of them are contruction workers who work for one guy for a few months and then move to another company for another jobsite. Most are LONG gone before the W-2's are ever reported, they've had 3 or 4 jobs before the information hits Austin (where the W-2's are filed). You did know that the only place individual information is filed is at the SSA didn't you? The IRS is not notified directly by the employers.