IG: IRS ‘Hindered’ Efforts to Stop Illegals from Misusing Social Security Numbers

The audit discovered that the employer with the very worst record for filing no-match W-2s had filed 117,792 over the three years—an average of 39,246 no-match W-2s per year.

An audit report published this month by the inspector general for the Social Security Administration says that the Internal Revenue Service’s reluctance to penalize employers who consistently file W-2s on which the Social Security Number and name do not match has “hindered” the SSA’s efforts to stop “unauthorized noncitizens” from using Social Security Numbers that are fake or belong to someone else.

The audit report looked at “inaccurate wage reporting”—or the filing of W-2 forms on which the name and the Social Security Number do not match. The SSA has long said these no-match W-2s are frequently filed on behalf of illegal aliens. According to the IG audit report released earlier this month, a senior IRS official admitted to the IG that the service knows this is the case.

“Furthermore,” said the report, “a senior employment tax official at the IRS acknowledged that unauthorized noncitizens accounted for a high percentage of inaccurate wage reporting.”

The audit looked at the U.S. employers who in tax years 2007-2009 (the latest for which all data was available) had the worst records for filing W-2s on which the names and Social Security Numbers did not match

The IG determined the 100 employers who filed the the largest raw numbers of no-match W-2s in those three years and the 100 employers (with at least 100 employees a piece) who filed the most as a percentage of their payrolls.

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