AZ planning crackdown on tax fraud; new scrutiny may
affect migrants most
Posted: Monday, April 11, 2011 12:00 am
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PHOENIX - Armed with a new computer
program, the Arizona Department of Revenue is cracking down on tax fraud this
year.
And although administrators say illegal
immigrants aren't the target, they're likely to be the majority of those caught
up in the effort.
People whose federal tax-identification
numbers doesn't match the information provided on their W-2 forms will not get
their refunds unless they can prove they are the ones who did the work.
The state and the Internal Revenue
Service encourage illegal immigrants to file income-tax forms and comply with
tax laws, which apply to individuals who earn money in the United States
regardless of their legal status.
In Arizona, where it's a crime to
knowingly hire an illegal immigrant, an immigrant will often work using either
a fake Social Security number or one that belongs to someone else. Their
employer puts that Social Security number on his or her W-2 form.
For tax filing, illegal immigrants - or
anyone in the United States legally who isn't eligible for a Social Security
number - must apply to the IRS for an Individual Tax Identification Number.
They then file taxes under that number.
The Arizona Department of Revenue's new
program will check all tax documents filed with tax ID numbers to make sure any
listed Social Security number and the tax ID number both belong to the employee
named.
If they don't, the state will send out
a letter asking the employee to prove he or she is the one who actually did the
work.
Anthony Forschino, assistant director
at the Department of Revenue, said about 60,000 Arizona residents filed taxes
last year using a tax ID number, resulting in about $6 million in refunds.
He said the state sampled a
"pretty good portion" of those returns and found that in 80 to 85
percent of them, the ID number did not match information provided on an
associated W-2.
This year, the new program will allow
the state to go through all the returns.
"We have a responsibility to try
and stop fraudulent returns," Forschino said. Forschino said officials
want to give refunds to those who earned them, regardless of legal status.
He said his department is still trying
to work out details of what sort of documentation an individual could show to
prove he or she is the one who did the work and paid the taxes.
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