Pam Justice wrote:

- quote -

Interesting you should mention that 50$ penalty per return
w/o a ssn. I've sent several batches with maybe one or two
missing ssn's in the last... oh... 20 years, and not once
has SSA ever penalized one of my clients.

Maybe there's a de minimus threshold.

Cheer$,
Harlan Lunsford, EA in LA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Dave Woods, EA wrote:
- quote -

It is very difficult to not hire Illegal Aliens without
violating the anti-discrimination laws. If the employee has
provided what looks like a valid social security number on a
W-4, and signed it, and the documents required for the I-9
and they show up for work they legally have to be paid and
the employer is required to withhold the correct federal and
state taxes.

They of course have to be paid over to the appropriate authorities.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com
(804) 320-6210 FAX (804) 320-6211

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Michael S. Rosen" <mike_20878[at]hotmail.com> wrote:

- quote -

Bureau of National Affairs (BNA) ran stories on this issue
on January 28, 2003, and April 9, 2003.

In the first article, it was reported that IRS planned to
send a letter to each employer who filed W-2s with SSN
discrepancies. Depending on the number of W-2s involved,
the letter might propose a penalty, but it also would direct
the employer to begin withholding at the highest rate,
single / zero.

The April 9 article reported that IRS had reconsidered its
position on having employers withhold at the single / zero
rate. According to the article, IRS also said it did not
intend to impose penalties automatically on all employers
receiving the notices.

You may be able to find more information on this issue at the website of
the American Society for Payroll Management (ASPM). As I post this,
their website is unavailable.

http://www.aspm.org

Barney Byrd
barney_bird[at]msn.com

To contact me directly, use the correct spelling of my last
name in the e-mail address above.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I know that the SSN administration will fine the employer
$50.00 for each employee without a ssn. It's always a
lose/lose situation for the emloyer. I had an employee
that told me he had all his papers and he had applied for
his ssn #. Then after he worked a few weeks we found that
he was lying and we had to terminate him. Can't wait to
find out what kinds of messes I will have to clear up over
that. We had taken out all the proper taxs.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Michael S. Rosen wrote:

- quote -

Yes, and especially if that Schedule H was filed in
connection with a business entity!

I also got a charge out of reading this the other day. From
what I've heard though, illegal aliens always have some kind
of bogus social security card. They're so easy to get, and
INS can do little about raiding those people.

Cheer$,
Harlan LUnsford, EA in LA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Mike_20878[at]hotmail.com (Michael S. Rosen) wrote:

- quote -

Here is one of the typical scenarios:

Employer hires an individual who is an illegal. Illegal
person (IP) has to have a social security number. IP
provides employer with bogus SSN. The SSN is either
made-up, belongs to a dead person or belongs to another
individual. Employers are supposed to know that any number
beginning with a "9" is an ITIN and not an SSN. Employer
remits withheld taxes. At some point, the SSA does a match;
notices that the name and SSN don't match for whatever
reason and sends letter to employer. Employer has two
choices. Do nothing or fire the employee. If employer does
nothing then the employer risks a fine (I don't know how
much) when the BCIS (used to be the INS) comes calling. Of
course, this assumes that the SSA gets around to notifying
the BCIS of all of these mismatches and the BCIS has the
manpower to pay a visit to the employer. If employer fires
the employee upon notification and the employer was part of
this scheme, the employer just hires the individual back
using another name and SSN. The feds keep the withheld
income and SS taxes that were remitted. It's my
understanding that the remitted SS taxes are supposed to be
held in suspense until the mismatch is resolved. It would
be interesting to know how much money sits in this category
and how it is identified on the gov't books.

The scenario for household employers takes the form of
either unreported cash payment, payment to an independent
contractor or it mimics the one above. In any case, if the
employer is going to remit withheld taxes, there is usually
a bogus SSN.

I've never seen an employer remit withheld taxes using an
ITIN. I would guess that this would trigger the SSA letter
to the employer immediately.

Alan
http://taxtopics.net

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Michael
S. Rosen" <mike_20878[at]hotmail.com> wrote:

- quote -

1) Many illegal aliens have SSN/ITINs. May not be their own,
but they provide one.
2) If you're doing work for a client who is engaging in this
activity, I would reconsider taking an engagement with
someone who knowingly does this.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I'm reading the SSA/IRS Reporter from the second quarter 941
package. Page 3 is titled, "Information for Employers Paying
Wages to Illegal Aliens." Under Employment Taxes they say,
"In general, if employers pay wages to illegal aliens, they
must withhold income tax, social security, and Medicare
taxes in the same manner as they would for their employees
who are U.S. citizens or lawful permanent residents. [...]
Wages paid to illegal aliens are subject to social security
and Medicare taxes even though the illegal aliens are not
eligible for social security benefits."

How is one to pay the tax if the employee is illegal and
therefore has no ssn/itin? I would imagine if a schedule H
is filed with no matching W-2 then flags would be raised.

Thanks.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->