A report came out last year that did not get the media attention I think it should have. It goes a long way in demonstrating the abuse of the immigration issue we are facing by what I call “renegade” employers. It was prepared by the Inspector General’s office of the Social Security Administration, made in the December 2008 audit report titled, "Effectiveness of Educational Correspondence to Employers." The number for the report is A-03-07-17105.
It reports that a single employer filed 37,375 W-2 forms in tax year 2005 on which the Social Security Number and the name did not match. These "no-match" W-2 forms often -- but not always -- represent an illegal-alien worker fraudulently using someone else's Social Security number or a fake number. An employer who files that many no-match W-2s in one year certainly knows that they are employing many thousands of illegal aliens.
There is no indication our federal government has taken any action to stop this employer from continuing to employ mass numbers of illegal aliens.
The purpose of this report was to examine the effectiveness of the so-called "Educational Correspondence" (EDCOR) that SSA sends out each year to all employers who file more than 10 no-match W-2s if those no-match W-2s also amount to at least one-half of one percent of the total number of W-2s filed by that employer.
These "no-match letters" list the Social Security numbers that were on the no-match W-2s the employer filed -- but only to a maximum of 500 Social Security numbers. Thus, if an employer files 37,375 bad W-2s, the letter it receives from SSA lists only the first 500 bad Social Security Numbers, not the other 36,875.
According to the inspector general, there were about 1,650 employers that filed more than 500 no-match W-2s in 2005. In fact, these 1,650 employers filed a total of about 2.6 million no-match W-2s in 2005, meaning they filed an average of 1,576 per employer.
The champion was the employer that filed 37,375.
Page 7 of the report is especially revealing. "Our review found that about 1,650 employers with over 500 name/SSN no-matches had reported about 2.6 million no-matches to SSA," it says. "They received EDCOR letters that included 907,000 of the no-matches. Consequently, they were not informed of about 1.7 million no-matches. These employers had reported no-matches that ranged from 501 to 37,375, and about 44 percent of the employers had reported SSA (sic) 1,000 or more no-matches to SSA."
Unfortunately, it is not unprecedented for an employer to file tens of thousands of no-match W-2s in a single year. In October 2004, the SSA inspector general filed an audit report analyzing the 100 employers that had filed the largest number of bad W-2s in the five years from 1997-2001. The inspector general did not name these "Top 100" bad W-2 filers but did cite the states in which they were located.
America's No. 1 filer of bad W-2s was an Illinois-based company that filed 131,991 no-match W-2s from 1997-2001, for an average of 26,398 per year. The No. 2 filer of bad W-2s was a Texas-based company that filed 108,302 no-match W-2s from 1997-2001, for an average of 21,600 per year.The Illinois employer, according to the inspector general, paid $5.4 billion in wages to employees whose Social Security numbers did not match their names. The employer could have been paying that money to Americans and permanent legal residents entitled to work in the U.S. who have valid Social Security numbers.
SSA will not give the Department of Homeland Security (DHS) the names of the employers who file massive numbers of no-match W-2s because they say that is protected tax information under Section 6103 of the Internal Revenue Code. Under the George W. Bush administration, DHS promulgated a regulation that instructed employers in how they could find "safe harbor" from having SSA's no-match letters used against them as evidence that they had knowingly hired illegal aliens.
The New IDEA Act (HR 3580), introduced by Rep. Steve King, R- Iowa, would make two key changes in federal tax law: It would prevent businesses from deducting from their taxable income the wages and benefits they pay illegal aliens, and it would make the IRS share information with DHS for enforcing immigration laws.
President Obama called on Congress last week to give what amounts to amnesty for illegal aliens, which also means giving amnesty to businesses that routinely hire illegal aliens and file no-match W-2s with the federal government.
Congress should pass Steve King's bill instead.
Update: This past week Immigration and Customs Enforcement (ICE) finally took positive action to punish these abusive employers. They have begun what they refer to as "Silent Raids". This is a procedure in which they send auditors to companies and "audit" the books looking for evidence of hiring undocumented workers. They report that they have issued over $3 million in civil fines to various companies already. These "Silent Raids" make it increasingly difficult for the employers to re-employ the undocumented workers, as had been the common practice in the past when, on rare occasion, the illegal activities of these companies were discovered. Credit should be given when it is earned and this is a case where ICE deserves some credit. I am skeptical, however, about the true sincerity of the action and can not help but wonder if it is merely a token effort for show purposes. The only way to be certain is by watching this carefully to see if the effort continues past the November elections.
Now, here is a clip about another very disturbing story which is developing and that we should all be calling on Congress to investigate:
On This Day in History:
1853 Commodore Perry 'requests' trade relations with Japan
1927 First commercial airplane flight to Hawaii
1940 Lithuania becomes part of USSR
1976 Jimmy Carter nominated for President by Democrats
Here is some music especially for Steve and my friends "down under":