A close analysis of the Gang of Eight’s amnesty bill (S.744) shows that illegal aliens will in fact not be required to pay back taxes in order to receive legal status, which the bill calls “registered provisional immigrant” (RPI) status.
This conclusion turns on one word used in the text of the bill: “assessed.” Under S.744, an alien may not even file an application for RPI status “unless the applicant has satisfied any applicable Federal tax liability.” (Sec. 2101, p.68-69) “Applicable federal tax liability” is defined as “all Federal income taxes assessed.” (Id.)
While this sounds good at first blush, one must look closer at the exact words used. First, “taxes assessed” does not mean “taxes owed.” A tax is “assessed” when the IRS officially records that a person owes a tax. (See, e.g., Warren, Gorham & Lamont Treatise on Tax Controversies, § 3.01; Warren, Gorham & Lamont Treatise on Tax Procedures, § 10.01) A tax assessment can happen in two ways. One, an individual files a tax return, tells the IRS what he owes, and, after correcting any mathematical errors, the IRS records it. (See 26 U.S.C. §6201) Two, the IRS audits an individual—whether or not he has filed a return—and, after giving the taxpayer an opportunity to contest, records how much the person owes. (See 26 U.S.C. §6212)
This leads to two possible scenarios in which the “back taxes” of an illegal alien will have been “assessed.” In the first scenario, the illegal alien has filed a tax return and the IRS has ”assessed” any unpaid portion of the reported tax. This will be a rare scenario since an illegal alien is unlikely to file a return reporting taxes that he is unable or unwilling to pay, for fear of causing trouble with the federal government. In the second scenario, the illegal alien is working off the books, has not filed a return, and has been audited by the IRS. This will also be a very rare scenario since the IRS has no knowledge of the alien’s existence. In short, despite the promises of the authors, the Gang of Eight has drafted a tax provision that will almost never require illegal aliens to pay “back taxes” as a condition of receiving amnesty.
Other language in the bill supports this conclusion. For example, there is no requirement that the alien present himself to the IRS for a tax assessment before or during the application process. Nor is there any requirement that an alien submit specific information (employment history, wages, etc.) that would indicate that taxes are owed. And even if S.744 required illegal aliens to submit such information to DHS when they apply for amnesty, there is no requirement that DHS share it with the IRS in order to allow an assessment.
Not only does the Gang of Eight bill utterly fail to make illegal aliens pay federal back taxes as a condition of getting amnesty, there is no requirement that illegal aliens pay state or local back taxes either. Finally, the Gang of Eight gives employers their own amnesty by failing to require that they too pay back taxes for any illegal aliens they employed over the years. In fact, the Gang of Eight amnesty bill provides that any documents provided by an employer to enable an illegal alien to apply for amnesty may not be used against him in a civil or criminal prosecution for hiring that illegal alien. (Sec. 2104, p.120).