You’ve hit on a very good point and I wish I knew the answer. I’ve heard that many of the SS numbers are duplicates or the SS numbers of deceased taxpayers.
You would think that in the first case that the legitimate tax payer would be audited for not reporting income, and that in the second case their would be an investigation into taxes coming in from a dead taxpayer.
I suspect that many employers know full well that the workers are illegal and simply pocket the money. In the case of the IRS I suspect they have some computer program that they run that tells them which are the likely bogus funds and they simply ignore the fraud and bag the money.
I think that the fraud and corruption involved on all sides of this will eventually rock this Republic right to its foundations. I think this is part of the reason for the desperation to pass this bogus amnesty, before anyone gets too much time to study the problem.
"In 1996 the Internal Revenue Service created the Individual Tax Identification Number (ITIN) to enable it to collect taxes from non-resident foreign investors who earned taxable income in the United States, but who were not legal permanent residents or citizens, and thus did not qualify for a Social Security number. In an apparent attempt to increase tax revenue through increased tax compliance, the agency decided also to allow illegal immigrants to obtain ITINs, and has actively promoted their use in cooperation with immigrant advocacy groups. Although the agency maintains the numbers are to be used only for the purpose of filing an income tax return, other entities, including some state motor vehicle agencies, banks, and mortgage lenders, began accepting the ITIN in lieu of customary forms of identification, for the explicit purpose of providing services to illegal aliens, who often lack conventional identification.
"Since 1996 the IRS has issued more than 7.3 million ITINs, of which only two to three million have ever been used on a tax return. A number of experts, including the Treasury Department’s internal auditors, have raised concerns over the years about the ITIN, suggesting that the liberal ITIN issuance policy may be increasing the potential for fraud, enabling illegal immigrants to receive benefits to which they are not entitled, and creating law enforcement problems.
"The IRS has resisted pressure to cease issuing ITINs to illegal aliens, arguing that its top priority is to encourage tax compliance. This may be a result, but the practice apparently has not increased tax revenue, and so is of questionable value – in fact the IRS has issued more in tax refunds and credits than it has collected in taxes from illegal aliens.
"The Treasury Department’s auditors studied the use of ITINs in the tax year 2001. About 530,000 Form 1040s were filed that year by aliens not authorized to work and using ITINs. The total tax liability of these returns was $184 million, after deductions and credits on total taxes due of $495 million. More than half of the returns reported no tax liability, and $522 million in tax refunds were claimed on these returns. Typically, most of the tax collection from illegal aliens (and all taxpayers) occurs as a result of withholding by employers, not in voluntary tax filings. As one Arizona tax preparer put it, when ITIN-bearing tax filers learn that their bottom line will not be a refund, "they walk."
"More than half of the ITIN returns included W-2 forms listing someone else’s Social Security number, and one in four of the individuals failed to report other wages and compensation for which they should have paid taxes.