IRS Keeps Tabs on Illegal Immigrant Filers

While locating illegal aliens in the United States has become a major homeland security priority since Sept. 11, one federal agency knows where many illegal aliens are, but won't share its information.

The Internal Revenue Service receives millions of tax filings each year from illegal aliens — even helping illegals file their forms by giving them Individual Taxpayer Identification Numbers. But under federal law, the IRS (more news | Web) is prohibited from sharing its data with other agencies.

"The internal revenue code really does not differentiate between legal or illegal status," said IRS representative Patricia Kirk.

ITINs are used in place of Social Security numbers on tax returns. One tax preparer said he frequently hands out ITINs to help hundreds of illegals file their returns.

"Not only can they actually file a tax return, but they can actually meet their rights and responsibilities as taxpayers and also enjoy some of the benefits that taxpayers enjoy," said Salvador Gonzalez of the Midwest Tax Clinic. "Some of them get money back. Some of them pay."

Since 1996, the IRS has handed out over 6 million ITINs, and some illegal immigrants hope by using the ITINs to file tax returns, they can show they are deserving of citizenship.

But at least one immigration group charges that the ITINs are merely a way for illegals to skirt the law and try to legitimize living inside the country.

"The federal government should not be doing a single thing to help these illegal aliens remain in the United States. They should be focusing their efforts like a laser beam on finding and deporting illegal aliens," said David Ray of the Federation for American Immigration Reform.

While the IRS can't share its information on tax filers with any other governmental agency — including the Department of Homeland Security, which recently took over duties of policing illegal aliens — immigrants continue to enter the country by avoiding the legal channels.

"It is another example of a schizophrenic federal government that hasn't quite decided what it is going to do about illegal immigration," Ray said.

Gonzales said he is pleased that illegal aliens are not only participating in the country's growth, but are being protected according to the laws of the land.

"This is the law. The law says that if you earn income in the United States you are required to pay income tax and you are required to file an income tax return," he said.

While the debate rages, illegal immigrants continue to dump income taxes into the federal coffers. The latest data shows that two years ago, tax filers with ITINs sent the IRS $300 million in taxes.

Fox News' Steve Brown contributed to this report.