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Dear Editor:
In response to Mr. Nachman's article, I think your article illustrates the problems employers face dealing with the differences in immigration issues and labor law. The IRS is faced with a similar problem. Although US immigration laws speak of immigrants, non-immigrants, and illegal aliens, US tax laws speak only of resident alien and nonresident aliens. Generally, resident aliens are taxed in the same manner as U.S. citizens, and nonresident aliens are taxed according to special rules contained in the Internal Revenue Code (Code). The tax residency rules are found in section 7701(b) of the Code. Although the tax residency rules are based on the immigration laws about immigrants and non-immigrants, they define residency for tax purposes in a way very different from the immigration laws. Any alien who is not a resident alien must be a nonresident alien. An alien can become a resident alien in one of three ways: (1) by being lawfully admitted to the US for permanent residence under the immigration laws (the Green Card test); (2) by passing the Substantial Presence Test (which is a numerical formula which measures days of presence in the United States); or (3) by making what is called the "First Year Election" (a numerical formula under which an alien may pass the substantial presence test one year earlier than under the normal rules). The Code requires all individuals to file U.S. tax returns if they have gross income subject to U.S. tax that equals or exceeds the exemption amount. Furthermore, the Code requires that every individual that must file a return, statement, or other document must furnish a taxpayer identifying number for themselves and any other persons required to be listed. For individuals, their taxpayer identifying number is his/her SSN. There is no distinction between legal and illegal aliens. For tax purposes, non-U.S. citizens are classified as resident and non-resident aliens. An alien individual not authorized to obtain an SSN and who is required to furnish a taxpayer identification number must apply for and furnish an ITIN. However, an ITIN does not affect an individual's immigration status, provide authorization to work in the U.S., or provide eligibility for social security benefits or the Earned Income Tax Credit. Disclaimer: this information is general in nature and should not be considered as legal, tax advice, or opinion provided by the IRS. One thing you did not mention in your article is that the SSA provides a service to employers to validate the social security number of an employee. The SSA offers employers and authorized reporting agents two methods for verifying employee SSNs. Both methods match employee names and SSNs. To verify up to five names and numbers, an employer can call 800-772-6270. To verify up to 50 names and numbers, contact your local Social Security office. Alternatively, the Enumeration Verification Service (EVS) may be used to verify more than 50 employee names and SSNs. Pre registration is required for EVS or for requests made on magnetic media. Please remember that the information is general in nature and should not be considered as legal, tax advice, or opinion provided by the Internal Revenue Service.

Ronald Rivelli
Internal Revenue Service