Thursday, 4 July 2013

Campaign of Tax Amnesty Looks Untenable

Many Op Ed columnists in American newspapers keep predicting that the new Immigration Bill has a hidden agenda to grant "tax amnesty" to illegal immigrants as the present bill is very vague on paying ‘back taxes’.

But the bill seems to be rock solid that immigrants have to clear a tax liability before qualifying for provisional legal status and pay taxes prior to renewing their legal status.

It was Dan Stein, an anti-immigration lobbyist charged the bipartisan group of senators for subverting immigration tax laws   by extending a tax amnesty to illegal immigrants with the bill’s hazy language that does not squarely address ‘back taxes’ and the methodology of tax assessment. His thesis was that taxes assessed was not same as taxes owed and this loophole will let many illegal immigrants get away without paying anything.

But these arguments fall flat if we consider that immigration tax laws assessment takes place only when the IRS official finds a person owing money thanks to that individual filing a tax return or IRS itself audits an individual  to know how much the person owes by way of taxes.

In the new bill aliens have to only pay taxes assessed by the IRS at the time of applying for registered provisional immigrant or RPI status. In case the IRS had no knowledge that the individual was working in the US, there would be no tax liability and the alien also will be at a loss in satisfying the purpose of getting RPI status.

Federal Tax Liability

Immigrants applying for provisional legal status pay taxes and will not receive provisional status until a federal tax liability is established by the Secretary of the Treasury. This discretion gives the IRS the power to decide how tax liability can be administered to immigrants seeking the legal status. 

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