It happened in 2001. I was a new business owner and I unknowingly hired an illegal alien. His name was Jose and he was a very good and hardworking employee. He presented me a picture ID and a social security card that looked very legit to me. There was no system or requirement in place for business owners to verify social security numbers. The only requirement was to make a copy of the cards, fill out an I9 and send it in and put the copies in their employee file. I did what was required and Jose worked for me for 2 years. During these 2 years, I was doing everything I was supposed to by taking taxes out of his checks and also paying 50 % of his social security and Medicare and 100% of his unemployment taxes. I was sending all the required documents to the IRS and issued him a W2 at year end. To my surprise, I received a call from the IRS one day, telling me that the social security number that I had been reporting for Jose did not match the name for Jose. They asked me if I had a copy of his cards in his employee file and if I could fax it to them so I did that immediately. I told them that what I had looked legit to me and that I was shocked to hear this and was not aware that it was not real. I asked them if I was in any trouble for this and they told me no and to just fax them what I had. I immediately called Jose to my office and told him about the call that I just got. I asked him where he got his Social Security card and ID and he told me that he had bought it from a guy in Dallas. I told him that now that I know all this he could no longer work for me so I fired him. He understood and left immediately. This all happened very fast. After Jose left I started thinking and asking myself these questions. Why did it take them 2 years to finally notice this? What happens to all the money that both Jose and myself had been paying towards his taxes? Will Jose ever be able to collect his social security benefits or Medicare benefits? Will he be able to draw any unemployment that I had been paying for? The answer is no to all these questions. It’s like a huge insurance scam by collecting premiums for something that they will never have to pay any benefits on. They don’t want it to end. Yet they have the nerve to tell us that Social Security is running out of money. Did ICE show up at my business to deport Jose? No. Was there any investigation started to go after this guy in Dallas that sold Jose the fake documents? No. After I faxed them what I had, I never heard anything else from anyone. Jose was let free to carry on and get another job. I did this unknowingly and was paying Jose the same wages that my American employees were making. However, there are so many employers that know exactly what they’re doing and know they can get away with it and are not paying the illegals proper wages because these illegals will accept lower wages and don’t seem to understand or care that our government is making them pay into benefits that they will never collect. This was such a big awakening for me and until business owners have to be held accountable and verify each employee before hiring them, this will continue.
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The IRS' primary role is to collect taxes, not enforce immigration laws. The IRS is focused on ensuring that income is reported and taxes are paid even if the filer is illegal. They likely found that additional monies were not claimed, and that red flagged the account. Let's face it he did owe income tax. The IRS is bound by strict confidentiality rules under the Internal Revenue Code (Section 6103). These laws prohibit the IRS from sharing taxpayer information even with other federal agencies unless very specific legal exceptions apply. Like the IRS, the SSA is focused on maintaining accurate earnings records and ensuring benefits are paid correctly not on identifying or removing illegal aliens. Federal law strictly limits how the SSA can share personal information. Under the Privacy Act and other statutes, the SSA cannot disclose data to ICE without a specific legal basis Federal laws like the Privacy Act of 1974 strictly limit how agencies can share personal data. Medicare cannot disclose beneficiary information to ICE without a specific legal basis
You are partly to blame in this situation because you did not do your due diligence, in hiring this guy. Employers are the gatekeepers to the workforce. They decide who gets a job, when, and under what conditions. Since they’re the ones extending the opportunity, it makes sense that they should ensure the person they’re hiring is legally allowed to work. Which could have been done using an inexpensive background check.
I am retired now and have been out of the workforce for quite awhile now so being able to do a background check is probably pretty easy now. I hired Jose in 1999 and didn’t find out he was illegal until 2001. I don’t recall any system in place back then that employers could do background checks like they can today. In addition to sending funds every week to the IRS on behalf of Jose, I was also sending money to the Texas Workforce Commission for his unemployment taxes and they never notified me. Shouldn’t these organizations have a system in place that red flags discrepancies immediately? I’m not in agreement that it is not their job to do that. What is their job? In addition, when is the last time you have heard of these people that are supplying illegals fake documents being arrested? It’s a big business and nothing is being done to stop it.
For your situation, it’s understandable to expect more proactive notification from government agencies, but legally and practically, the onus has been on employers to verify eligibility. Today, employers have access to more robust electronic verification systems like E-Verify, which can instantly check work authorization status against government databases, a tool that was not widely available or mandatory back then.
E-Verify was not available when this happened to me. And even now it is not being enforced on a national level as a requirement for all employers to verify before hiring. It looks like some positive moves in this direction in 2025 are taking place but still work to be done. I can only suspect that the current positive moves are because of Trump and our current administration. Here is some good information that I found about this subject. https://tax.thomsonreuters.com/news/e-verify-in-2025-what-employers-need-to-know-about-federal-and-state-compliance/