By the time Tax Day rolls around every April 15, accountant María José Solís usually has more to do. More clients. More paperwork. More phones ringing, more emails and WhatsApp messages pinging.
But this year, she said, more than 550 of her regular clients have disappeared. That’s about 15 percent of her customer base at Toro Taxes, the bilingual firm in Wheaton, Maryland, that Solís runs.
These numbers continue a trend that could cost the government billions of dollars in unpaid taxes. Solís and her staff said they began to notice the shift last year, shortly after the IRS agreed to share personal information with U.S. Immigration and Customs Enforcement officials, including the addresses of about 47,000 immigrant taxpayers who were subject to deportation.
The Trump administration’s decision to reverse a long-standing practice to keep IRS information walled off and encourage undocumented immigrants to file tax returns has stoked fear and distrust — and led to a marked decline in the number of immigrants willing to engage in the tax system amid a parallel escalation of ICE arrests.
ICE agents made nearly 20,000 arrests in D.C., Maryland and Virginia since the start of President Donald Trump’s second administration last year through early March, according to a Washington Post analysis of recent federal data. That was nearly five times the amount of similar arrests that took place in the last full year of President Joe Biden’s term.
“It has been crazy for us,” Solís said earlier this week. “I mean, we still have a few more days to go, but my clientele is like 80 percent Latino. So we have been very impacted.”
Immigrants who are not legally authorized to work in the United States still do so — and many opt to pay into the tax system through a federal individual taxpayer identification number (ITIN) that is available to people who don’t have Social Security numbers. Federal data shows that as of 2021, there were 5.4 million active ITIN users, though not all are assigned to undocumented immigrants.
Historically, having a record that shows a willingness to work within the system, pay taxes and contribute meaningfully to the community has benefited immigrants as they apply for legal status in the U.S.
Now, an overriding fear of what could happen with such exposure has overtaken the desire to demonstrate a long-term pattern of good behavior, experts and tax professionals said.
Solís said some of her clients have been deported. Others have left the region or the country on their own. Still more, she said, have decided against filing tax returns.
Employers who pay immigrant workers under the table to avoid attracting unwanted attention to their undocumented workforce may decide not to declare wages or withhold income tax over the year.
The combined result is a larger underground economy at the expense of tax revenue that helps to fund Medicare, Social Security, public infrastructure like schools and roads, and paying down interest on the national debt.
“If people have given up on the idea of filing a return and think they don’t have a path to citizenship, they might want to move into a more informal job where there is no withholding, no reporting, no documentation,” said Carl Davis, research director at the Institute on Taxation and Economic Policy. “All this is an upheaval in the economy that we’re all still puzzling through.”
The Yale Budget Lab estimates that the IRS stands to lose between $147 billion and $479 billion over the next decade as migration to the U.S. declines, deportations increase and immigrants of various statuses disengage from the formal economy for what some experts say may be an extended period.
“This climate of fear has really undermined trust in what the government says, and even if we have a different administration come in that has different immigration policies, I imagine it will be really hard to rebuild that trust. So we’re looking at a reduction in the number of immigrants who file taxes probably for many years to come,” said Tara Watson, a senior fellow at the Brookings Institution. “I don’t see a way to unwind the clock on that.”
The IRS did not respond to a request for comment.
Immigrants have for decades been a key contributor to the U.S. tax base in more ways than one.
Undocumented immigrants pay billions of dollars in federal payroll taxes that are withheld from their income — even though they are not eligible to receive the benefits they are paying into, including from Social Security and Medicare programs, according to the nonprofit Institute on Taxation and Economic Policy.
The libertarian Cato Institute think tank said in a February report that, in each year since the institute began tracking data in 1994, immigrants paid more in taxes than they received in benefits, resulting in a cumulative fiscal surplus of $14.5 trillion over 30 years.
Undocumented immigrants are also estimated to pay about $12 billion in annual state, and local sales, excise, income and property taxes, Davis said.
“People often fixate on income taxes, but our tax system is actually a lot more diversified — there’s utility bill taxes and property taxes and sales taxes and so on. Just living normal life in this country, you’re going to pay taxes,” Davis said. “There’s no question that increased deportations and lower rates of entry into this country are negatively affecting tax revenue collections of all kinds.”
In an analysis of ICE deportation data last month, the Associated Press calculated that there were about 400,000 deportations nationwide during Trump’s first year in office, a figure that conflicts with the Trump administration’s accounting, which put the number of deportations at “more than 675,000,” according to a January statement from then-Homeland Security Secretary Kristi L. Noem.
Solís and others who work closely with immigrant communities have tried to dispel some of the fear that has taken hold by encouraging families to file — and not leave possible tax returns on the table.
But, she said, that has gotten harder.
Changes to federal tax policy has cut many immigrant families out of being able to receive the child tax credit — a tax offset provided to families with children under the age of 17. Before recent changes, only the children being claimed had to be U.S. citizens. Now, at least one parent must have a Social Security number.
“That’s just another shot to the heart — it’s just a way to punish immigrant families more,” Solís said. “For people who have in the past seen filing their income taxes as a way of getting some money back, they may not see that refund now. So it makes it less attractive for people and maybe they don’t want to file again. That’s already having an impact.”
Solís said her phones have been ringing with new questions that extend beyond tax season: clients looking for an immigration lawyer or asking how to protect their children in the event of a deportation or family separation.
Accountants with immigrant clients of mixed legal status have begun to get creative in their advice. Some have helped immigrant entrepreneurs set up business accounts and file their taxes using the shield of a limited liability company, or an LLC. Others have begun to offer additional support — connecting clients to immigration lawyers and other resources.
Solís knows that she is often the one person families believe they can trust when it comes to their finances — and planning for their futures, however uncertain. She sees herself as an ambassador of sorts between the immigrant community she serves and the government institutions of which many may be leery.
On Wednesday, she plans to infuse a little levity into Tax Day.
She knows there are families who remain undecided about what to do, she said. She’s spoken to some of them. So, she said, she wants to make a daunting process feel easier, lighter, more welcoming.
“We want to give people every possible chance to come in to get the help they need,” she said.
Inside the small office of Toro Taxes Wheaton, beyond the cubicled desks and glass meeting rooms, Solís is planning to throw a party. She has invited Spanish-speaking DJs from local radio stations and television news crews to come talk about taxes — how to file them and why — and help give away raffle prizes. There will be music. There will be refreshments.
And the doors won’t close until the stroke of midnight on April 16.
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