'The Borrowers': IRS Allows Illegal Immigrants to Steal SSNs for Tax-Filing Purposes
Segall spoke with two IRS whistleblowers who said they were coming forward out of love for their country.
"I just can't do this no more. It's not right," said one of the IRS workers.
"That's why we're both here," said the other, echoing her colleague with long, deliberate pauses. "It's a crime, and it's…just…not…right."
Together, they have decades of experience at the Internal Revenue Service, working on the front lines with frustrated, angry or confused taxpayers who contact the agency for help.
Risking their jobs to come forward, the whistleblowers do not want to show their identity. But they do want to show how the IRS is a knowing accomplice to millions of cases of identity theft while keeping victims in the dark.
"We are not supposed to do anything." said a whistleblower. "We are not allowed to say anything."
The five-month investigation found that while the IRS "claims to be taking identity theft seriously, the reality – in many cases – is very different":
- The IRS accepts millions of tax returns – and issues tax refunds – even when taxpayer documents show clear warning signs of identity theft
- Confidential IRS policies instruct IRS employees not to tell taxpayers when someone else uses their Social Security number to earn income
- The IRS allows illegal immigrants to "borrow" Social Security numbers that do not legally belong to them
- The IRS is discontinuing a program to notify taxpayers when their Social Security number is used by someone else to gain employment
Unable to snag an interview with any IRS officials at the agency's headquarters in Washington, D.C., Segall turned to the the official Internal Revenue Manual (IRM), the massive, 21,000-page long policy bible for IRS employees. He made some jaw-dropping discoveries.
Some of the manual is "official use only" meaning it's kept secret from the public. But through internal sources at the IRS, 13 Investigates obtained confidential sections involving employment-related identity theft.
One of the confidential chapters warns IRS employees "Do not disclose to the taxpayer that … their SSN was reported on an ITIN return" and used by someone else to get a job. It instructs IRS workers not to mark the victim's file with a special identity theft code, explaining "Employment related identity theft is not a tax administration issue because the SSN owner's Master File tax account is not affected."
In multiple sections, the IRS manual also suggests employment-related identity theft is of little concern, referring to an undocumented worker who use someone else's Social Security number as a "borrower" who is simply "working under a ‘borrowed' SSN."
The IRS employees who spoke to WTHR expressed frustration because although employment-related identity theft was very common, they weren't allowed to do anything about it. One of the whistleblowers was threatened to "watch her step" when she brought the issue up to her supervisor.
"If you are borrowing something and that person doesn't know and probably wouldn't want you to borrow it, that's not borrowing, that's stealing," said one of the whistleblowers. "You can't do that. You're taking something without that person's consent. That is stealing."
"And we see it every day – eight hours a day -- you see this over and over and over and over again," said the other IRS employee. "And I know where the person lives, where they work… I see all of that and I'm not allowed to say anything. I'm not allowed to tell them. I talk to mothers who get [IRS] letters [about under-reported income] for their newborn babies. I talk to widows calling about [IRS letters claiming under-reported income for] their dead spouse, and there's nothing I can do. I know who stole their identity, but I can't say ‘Look, I'm sorry, but your baby's Social Security number is being used in the Bronx, New York, by this person that lives at this address."
The IRS employees told 13 Investigates they routinely see the same Social Security number used to report income on as many ten, twenty, even thirty different ITIN tax returns. They say raising concerns to IRS supervisors – which they have attempted to do multiple times – is risky.
"We can't say anything because we'll be reprimanded and written up. The last time I said something I was told ‘watch your step.' Every year we go to mandatory briefings where they tell us ‘sit down, shut up and don't say anything.' They need to be more honest with the taxpayer," said a whistleblower, shaking her head in discouragement.