Important that tax problem be sorted soon

Two lawsuits contend the New Mexico Taxation and Revenue Department is sitting on refunds — years of them — that rightfully belong to immigrant taxpayers as a means to further Gov. Susana Martinez’s supposed anti-immigrant agenda.

The state Taxation and Revenue Department says in turn that the only returns being held up are those that contained disparate identification numbers that could indicate fraud.

There’s no question that honest, hard-working folks who pay their taxes deserve their refunds in a timely fashion. But Marek Grabowski, who is representing Tax & Rev, says the department is only flagging returns that have an individual taxpayer identification number (ITIN) on a tax filing but a Social Security number on a W-2 statement submitted with it.

And that’s because an individual should never have both.

An ITIN is a nine-digit tax-processing number created and assigned by the IRS to individuals who are obligated to file a federal tax return but ineligible for a Social Security number. That would include nonresident or resident aliens whose work during the year requires them to file, regardless of immigration status.

As the courts sort out the 31 pages and years of allegations, it is important to note:

• Individual taxpayer identification numbers have routinely been the means used to fraudulently obtain state driver’s licenses, and

• The federal government has identified hundreds of millions of dollars in potentially fraudulent refunds and is prosecuting what it believes are multimillion-dollar fraud rings designed “to steal money from the U.S. Treasury and U.S. taxpayers by exploiting the ITIN system.”

Just as the state has a fiduciary duty to refund to taxpayers what they have overpaid, it has a responsibility to pay attention to red flags that could signal attempts at fraudulently dipping into the public’s coffers.

The lawsuits say the plaintiffs routinely filed their taxes with ITINs, which were established in 1996, and received their refunds until 2012, when the state started flagging returns that had them. They maintain that the policy “has resulted in the department deliberately keeping hundreds of dollars owed to plaintiffs, and millions of dollars owed to thousands of other New Mexico taxpayers.”

Meanwhile the state maintains it is looking at those that have both an ITIN and a Social Security number tied to the same taxpayer’s wages.

None of this was sorted out in time for Monday’s filing deadline, but it is important to get it sorted out as expeditiously as possible.

Honest taxpayers deserve their refunds, and folks who would game the system by using fraudulent ID numbers deserve a very different kind of day in court.

— Albuquerque Journal