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TheStreet Open House

Immigration Bill Does Not Require Payment Of Back Taxes

WASHINGTON, April 30, 2013 /PRNewswire-USNewswire/ -- For months now, the "Gang of Eight" senators, President Obama, and the lobbyists who helped craft the Schumer-Rubio bill have been justifying amnesty by assuring skeptics that illegal immigrants applying for legal status would be required to pay back taxes on money earned during the years they lived illegally in the United States.

(Logo: http://photos.prnewswire.com/prnh/20120806/MM52838LOGO)

Except the actual bill does not require the payment of back taxes.

Instead, the bill provides that amnesty applicants must have "satisfied any applicable federal tax liability" that has previously been "assessed" by the Internal Revenue Service (IRS). A tax is "assessed" only when the IRS officially records that it is owed which occurs after a tax return has been submitted or after the IRS has conducted an audit. Since illegal immigrants working off the books do not submit tax returns and are generally not the subjects of IRS audits, it is unlikely that this provision will have any impact on the majority of amnesty applicants.

The bill also does not address employers' federal payroll tax liability (e.g. Social Security and Medicare (FICA) taxes), nor does the bill address liability for state and local taxes.

"The absence of a back taxes provision is yet another example of how this bill gives a pass to lawlessness on the part of both illegal immigrants and their employers. The Gang of Eight should be embarrassed for attempting to mislead the American people," said Jon Feere, Legal Policy Analyst at the Center for Immigration Studies.

The lack of specific language on back taxes requirement should not come as a surprise.

Sen. Charles Schumer (D-N.Y.) worked to prohibit the IRS from requiring illegal immigrants pay back taxes in the 1986 amnesty. Similarly, the amnesty bill of 2007 originally included a requirement that illegal immigrants pay back taxes until the Bush administration persuaded Congress to remove the provision. The National Taxpayers Union estimated the change would mean a loss of tens of billions of dollars, and argued that most law-abiding Americans would find the change "totally distasteful."

"If this bill becomes law, it will be clear that only citizens are responsible for paying taxes, and that illegal immigrants are above the law," said Mr. Feere.                            

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