With a Note from the Boss, Illegals in Kansas Get Tax Refunds

By on March 21, 2017

The state of Kansas' finances are in tatters, but it nonetheless explicitly allows illegal aliens, using criminally obtained Social Security numbers, to receive state income tax refunds. There is a minor catch — the SSN thief has to have a note from his or her employer if the use of the bad SSN is noticed by Kansas tax collectors before the refund can be paid.

So, on one hand, an illegal alien worker who uses a phony SSN can get money from the state, money that might have gone to the state's beleaguered schools, while simultaneously a double standard has been set for employers: A knowing employer of an illegal can preserve a tax benefit for his illegal workers (thus lessening pressure on him to raise wages) while the unknowing (and perhaps innocent) employer of other illegals gets no such indirect benefit.

Sounds like Alice in Wonderland.

Before we get into the nitty-gritty of how this policy works, it is only fair to note a couple of caveats.

Caveat One. We have no way of knowing that Kansas' Republican Governor, Sam Brownback, is even aware of this element of his state's tax policy, although of course he should be. Brownback, as a member of the U.S. Senate, usually supported anti-illegal-alien sentiments, though he was soft on nonimmigrant worker programs for agriculture.

Caveat Two. We suspect that a number of other states have similar lax policies on the use of criminally acquired SSNs in their state tax system, but we have not yet been able to find one that not only admits to such a policy, but puts it in writing. So Kansas stands accused of both a terrible public policy and the honesty of admitting it.

In an earlier posting we described the utility of denying income tax refunds to those illegal aliens using phony SSNs, and the difficulty experienced in prying information out of governments on this matter. Were such refunds, often a major part of one's income, to be denied, perhaps some illegal workers would return to their homelands. And non-payment of these refunds would help the state's licit taxpayers.
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How It Works in Kansas. Our text here is a published document from the Kansas Department of Revenue entitled: "Notice 16-2 Credit for withholding tax paid by a worker who does not have a Social Security number (Feb. 29, 2016)", something issued during Brownback's second term as governor. The relevant part follows:

The Department has identified a number of cases where a return has been filed using ... a Social Security number that does not belong to the taxpayer. In these cases the Department has disallowed any credit for withholding tax claimed by the taxpayer.

A taxpayer whose claim of credit for withholding tax has been disallowed may request the credit be allowed by providing documentation to correct or explain the discrepancy between the identification numbers shown on the income tax return and the Form W-2. This can be done by ... a written statement from the employer which indicates the total amount of Kansas income tax withheld and the Social security number under which the employer remitted the tax.

In other words, if the illegal gets a note from his or her employer, his or her use of a criminally acquired phony SSN is excused. One commits a federal crime when one uses an illicit SSN and Kansas overlooks it — but only if the employer is in on the conspiracy.

Perhaps if this information is picked up by the media in Kansas either the governor or the state legislature might take corrective action; if this happens, it will be recorded in these postings.