Thursday, May 18, 2006

Flashback article... and current solution

One Firm Filed 33,448 Bad W-2s
Every year the Social Security Administration consigns up to nine million hopelessly inaccurate W-2 reports to a Social Security limbo.

It is called the Earnings Suspense File (ESF), and it is the final resting place of W-2s that cannot be matched to a known taxpayer. Some, for example, have no Social Security Number. Others have a Social Security number never issued by the government. Between 1985-2000, 3.5 million of the W-2s landing in the ESF file had a Social Security Number that was used for multiple workers by the same employer in the same year.

Citing competing demands for DHS resources in a post-9/11 world, GAO says, "At present, it is unlikely that DHS will take enforcement action against employers and workers who submit inaccurate information to SSA to conceal unauthorized work activity."

This is where the solution proposed by Rep King, the one that Lars talks about a lot, comes into play. You submit documents where the social doesn't match the name, the social doesn't exist, or the social has multiple users then you don't get to deduct that employees wages as a bussiness expense.

The information already exists to use this solution, no new laws need to be passed, just enforce the ones we currently have. An illegal alien is not allowed to work in this country. That's it.


Sue K. said...

Oh, but you can bet your last dollar that if I made an honest mistake on our tax return and owed the IRS peanuts, they would be after us pronto. Just another fine example at how illegals and their employers get off without even a slap on the hand. Priceless!

R Huse said...

You know, way back in high school I did this very thing. I felt the bank had no need of my social security number so I just made one up. Guess what, within two months my bank account had been frozen. They sure came after me for all that interest on a whopping $40 account balance. Maybe its me but enforcing a “no match up” situation seems about as easy a law enforcement matter as one could ask for. They don’t have the resources? Excuse me? What exactly are we paying you for?

Daniel said...

You can make up a number at the Oregon DMV though! I'd love for someone to put 123-45-6789 on a form and take a picture of it!

Ric said...

Well it would be good if they have kept that money.

Senator McCain et al, blocked an ammendment which would have prevented illegal, um er, unexpected long term guests, from collecting Social Security.

If this continues, the Presidents plan for amnisty, um, er he is opposed to amnisty, so compassion on those less fortunate who got here any way possible, if they stay long enough, then they can claim social security and get access to the funds they paid prior to his plan being enacted.

It could turn out one guy, the dude who hundreds of people paid SS tax on behalf of his/her SS Number, could get a real nice pay out.

The rest will have to protest in the streets so we can pay them on what they estimate they paid into the program.

Kristopher said...

And .... the IRS can tote up how much money the company saved by hiring said worker "under the table", and then treat that as unreported income.

Anonymous said...

My business (sole propreitor) was audited for a lousy $126.87. You bet your ass the IRS was serious about collecting from me.