Fact check: How do undocumented immigrants pay taxes without a Social Security number?

1. Summary of the results

Undocumented immigrants pay taxes without a Social Security number by obtaining an Individual Taxpayer Identification Number (ITIN) issued by the Internal Revenue Service (IRS) ^{[1] [2]}. The ITIN system allows individuals to file tax returns regardless of their immigration status, enabling undocumented immigrants to fulfill their tax obligations.

The financial impact of undocumented immigrant tax contributions is substantial. Households led by undocumented immigrants paid $89.8 billion in total taxes in 2023 ^[3]. ITIN holders may be eligible for certain federal tax credits, though with limitations ^[1]. The analyses confirm that undocumented immigrants have tax-filing responsibilities and face potential consequences for non-compliance with tax laws ^[2].

2. Missing context/alternative viewpoints

The original question omits several critical developments that significantly impact undocumented immigrant tax compliance:

• Recent policy changes are creating fear and reducing compliance: A data-sharing agreement between the IRS and the Department of Homeland Security has sparked concern among undocumented immigrants who have been paying taxes, as this deal may lead to sharing taxpayer data for immigration enforcement purposes ^{[4] [5]}.
• Economic consequences of reduced compliance: Fear of deportation may lead to decreased tax compliance among undocumented immigrants, with estimated losses of $9.5 billion annually for every 10-percentage-point drop in tax compliance ^[5]. This represents a significant potential revenue loss for federal and state governments.
• Legislative proposals affecting tax credits: The One, Big, Beautiful Bill requires anyone claiming refundable tax credits to provide a Social Security Number, which would effectively exclude ITIN holders from these benefits ^[6]. This legislation also levies new taxes on remittances sent to foreign countries, directly impacting undocumented immigrant communities.
• Trust and compliance relationship: Many undocumented immigrants who previously paid taxes "in good faith" now feel betrayed by the IRS-ICE agreement, fundamentally altering the relationship between tax compliance and immigration enforcement ^[4].

3. Potential misinformation/bias in the original statement

The original question itself does not contain misinformation or bias - it is a straightforward inquiry about tax procedures. However, the question's framing could inadvertently perpetuate assumptions that undocumented immigrants don't pay taxes, when in fact they contribute billions in tax revenue annually through the ITIN system ^[3].

The question also doesn't acknowledge the complex policy environment surrounding this issue, where government agencies and lawmakers benefit from different narratives: some benefit from emphasizing undocumented immigrants' tax contributions to support comprehensive immigration reform, while others benefit from policies that may reduce this compliance to support stricter enforcement measures.