Posted on 04/17/2006 6:45:07 AM PDT by .cnI redruM
Last week, I posted a note from a reader who urged that businesses not be allowed to deduct wages of workers who cannot prove their legal status in the United States.
I didn't post the reader's name at the time, but he has since given me permission to give credit where credit is due: His name is David Barulich, and he is a financial professional in Pasedana, California.
Meanwhile, another reader - who prefers anonymity - offers this addition to Mr. Barulich's concept:
"Your reader's suggestion to modify the Internal Revenue Code, so that employers could only expense employee wages if they verified their legal employment status, has ramifications that go much deeper than you may have realized.
"If this were implemented, mid-sized to large companies would not be able to have illegal employees and also use their accounting software, because the law would require categorizing employees into those that they could expense and those they could not. No accounting software company would dare add a feature to permit companies to pay some workers without expensing their wages, as this would be a de-facto accommodation for companies intentionally hiring illegal workers.
"Furthermore, the Sarbanes-Oxley Act (SOX) comes into powerful play here. Once employment of illegals becomes a matter of the accuracy of the income statement, then companies that issue stock on any U.S. stock exchange would be forced to stop hiring illegals.
"SOX section 302 requires the principal executive and financial officers of a company filing periodic reports to certify in each quarterly and annual report that the report is not misleading in the way it represents the financial condition and results of operations of the company. The law makes these two officers civilly and perhaps criminally liable if the report contains financial information that the officers reasonably should have known was false.
"A financial statement that included tax expenses for employee wages would be implying that all of these workers were legal. If in fact the company were hiring illegal workers and claiming their wages as business expenses, then they would be submitting false financial statements.
"Furthermore, SOX Section 404 requires each annual report of an issuer to contain an 'internal control report', which shall:
"(1) state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and
"(2) contain an assessment, as of the end of the issuer's fiscal year, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting.
"Each issuer's auditor shall attest to, and report on, the assessment made by the management of the issuer.
"So the bottom line is that if the Internal Revenue code were modified as your reader suggested, then, in order to satisfy SOX Section 302, the CEO and CFO would have to certify in the company's quarterly and annual reports that the company was only claiming expenses for legal workers. Section 404 would require them to assess the adequacy of their business control procedures for making certain that they were only expensing for legal workers, and it would require their external auditor to attest to the adequacy of such controls. This would mean that the major auditing companies would have to develop standards for the auditing of companies' hiring practices. It would bring the hiring of illegal workers to an abrupt halt in companies that issue stock on U.S. exchanges."
- Let me add one final comment here. Opponents of enforcement of the immigration laws have a way of throwing up their hands as if enforcement were simply hopelessly impracticable. And yet the United States manages to operate many far more complex regulatory regimes, from the Internal Revenue Code on down. None are enforced perfectly - but then, few things other than a nuclear power plant need to run perfectly. But in most areas of the law, most of the time, people are expected to follow the rules - and are held accountable if they do not. Immigration is treated as some unique exception. Why?
ping
I'm waiting for Congresscritters to consider that. (/sarcasm.)
Actually many liberals might like it. Sock it to the evil corporations for something the government is unwilling to do anything about. It is a great anti-capitolistism idea.
1. No illegal immigrant should have any legal standing in U.S. civil courts. This means they can't file civil lawsuits, and can't have civil lawsuits filed on their behalf.
2. Related to #1, any illegal immigrant who is faced with a valid civil lawsuit should automatically have a default judgement rendered against him -- and all of his assets should immediately be seized by the court and turned over to the plaintiff.
3. Illegal immigrants should have no legal standing in U.S. criminal courts, and no legal rights under the U.S. Constitution. Any illegal immigrant charged with a crime should be prosecuted as an "enemy combatant" and should have his case adjudicated before a military tribunal. Someone who enters this country illegally and commits a violent crime isn't a "criminal" in any sense of the word -- he's a foreign invader.
Any Federal action aimed at addressing this issue that doesn't include items like this -- if nothing more, for the sole purpose of drawing clear lines between legitimate U.S. residents and those who have no right to live here -- will be a complete farce.
I just had a brainstorm!
Why can't we American Taxpayers deduct an alien family?
Well, I suppose you could once you legally adopted them, and if they all had legitimate SSN's.
Good luck!
Democrats and some corporate interests want it that way. It works as a smokescreen. Same reason rounding up and deporting illegals is portrayed by most as "impossible" or "impractical". You do it the same way they got here, a little at a a time. 5,000 per day would bring us to about parity. Once we get to net plus per day flow back to Mexico, it's only a matter of time.
This would really hit Tyson's hard.
LOL!!! To funny.
Heck we taxpayers are supporting them.....all those welfare benefits, schools, hospitals that we are forced to pay for to support the leeches.
Great post!
I think this should be bumped all day.
Let's use some of those millions of pages of regulations the government publishes every year against them for a change.
I just thought of one potential problem with this, though . . . I'm not too keen on the idea of having publicly-traded corporations serve as the enforcement arm of the U.S. government in an area where the U.S. government simply doesn't have the political will to do it. I can easily see this developing into a corporate nightmare where you have these companies proseucted for Sarbannes-Oxley violations in cases where they had employees on their payroll with their own fraudulent paperwork.
I would agree that opponents of immigration enforcement are very skilled at making the perfect the enemy of the good.
Excellent idea.
This is F'ing genius. It destroys the advantage of employing illegals and rewards companies that hire citizens or legal immigrants.
They can check this through the existing federal document database, which employers are avoiding like the plague.
If someone clears the dbase, then the company could be held exempt from prosecution.
It makes the IRS serve a useful purpose for a change...
The Texas legislature is now debating a bill (the Governor's bill) that would impose a business tax on profits but employee compensation would be deductible. I wonder if he would be willing to cooperate?
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