Originally Posted by
MaxQ
I follow your logic.
Every employee in any sort of payroll system has to have a tax ID number or a Ssec number.
Elsewise the employer is unable to deduct the wages as expenses. Or issue a 1099.
If the employer pockets the Fica withholding, They could do the same with IRS withholding.
Of course they would get caught when they issue 1099s and the immigrant, whether documented or not, files their taxes.*
I suspect it happens, but the risk to the employer would be high.
*Yes, large numbers of people in the USA without documentation file tax returns.
How do I know this? Because my wife used to run a small side business in which she did tax returns.
Due to language skills, essentially all her clients were immigrants. A significant percentage were not documented. They still filed taxes so they would be left alone.
They also cheat by “sending” illegals 1099’s for work they never did. The contractors are unloading their own tax debt. Immigrants never files it or could not even get it, or could file it since a surprising amount of income under 1099 carries very little taxes. Can’t object anyways because usually that is the only hand feeding them.
Not reporting a 1099 makes the employee look like they are underreporting their income, doesn’t really carry the appearance the employer is unloading taxable income onto others illegally.