Massachusetts Community Economic Development Center Warns ITIN Holders Face Chilling Effect

(MASSACHUSETTS) — Massachusetts tax preparers are reporting a sharp drop in ITIN filings among immigrant communities for the 2026 season, driven by fears of IRS data sharing with DHS and confusion about what ITINs are for, raising fresh questions about how policy, trust, and access shape tax compliance.

Community sites say the pattern is clear. When families hesitate to file, they may delay refunds and leave gaps in prior-year records. Mixed-status households can pull back, too. Public finance feels it in quieter ways. Revenue estimates get less predictable when fewer people file on time.

Use this guide to decide your next steps, find trusted help, and show up prepared.

What you’ll need before you start

Bring what you already have. Don’t wait for “perfect” records.

• A photo ID for each filer, if available
• Social Security numbers or ITIN documents for you and any dependents
• Wage and income forms you received
• Any letters you got from the IRS or Massachusetts DOR
• A way to securely store copies (paper folder or encrypted digital folder)

1) Overview: Immigrant tax-filing climate in Massachusetts (2026 season)

New Bedford is seeing the chill first. The Community Economic Development Center (CEDC) has watched ITIN holders pause or cancel appointments that would have been routine a year ago. Similar concerns are being reported by immigrant-serving groups in Cambridge, Boston, and across the Greater Boston area.

Trust drives compliance. When trust drops, people disengage from the tax system. That can mean unfiled years, delayed refunds, and more stress if a notice arrives later. It can also mean families lose the routine of gathering documents and keeping records.

Households feel the impact quickly. Refund timing may change. Some credits may be missed if a return is never filed. Local budgets can feel it later through shifts in withholding patterns and filing volume.

2) Key factors driving the decline

Fear about information sharing is the biggest reason tax preparers hear. A Washington Post report described IRS transmission of taxpayer data to DHS. It also reported the sharing continued despite two federal court decisions blocking their agreement. Even when filing is still legally required, perceived enforcement risk can change behavior overnight.

Confusion about ITINs adds another barrier. An ITIN is a tax processing number the IRS has issued since 1997 for people who need a U.S. taxpayer number but cannot get a Social Security number. In practice, many families see an ITIN application as a new data trail. Some decide it is safer to delay.

CEDC’s deputy director, Brian Pastori, described a steep falloff. ITIN-related activity fell last year, and staff expect more pullback during the 2026 season. Waitlists also shifted fast after President Trump’s return to office, with fewer immigrant clients staying in line for help.

Capacity constraints make the problem worse. Free sites can fill up early, and long appointments leave less flexibility when people reschedule at the last minute. If you wait until late March or April, you may have fewer options.

Not filing can create its own problems. Penalties and interest may apply in many cases. Missing returns can also complicate future financial steps, like renting, refinancing, or applying for certain benefits. Immigration outcomes are fact-specific, so many families ask a qualified attorney before taking action.

[Callout 1 — Information] What immigrants should know about ITINs Purpose: An ITIN is used for federal tax administration. It lets people file returns and be included on tax forms when they don’t qualify for an SSN. Perceived risks: Many clients fear IRS information could be shared with DHS, especially after reporting on IRS–DHS data transfers and related court fights. Why some delay: Applying can feel like creating a new record. Some families choose to pause filings, even when they otherwise would file to claim refunds or stay current.

3) Economic and policy context in Massachusetts

Tax participation is also a story about local economics. In 2022, immigrants without lawful status contributed $650 million in Massachusetts state and local taxes. Those estimates are built from models, not individual files, but they help explain fiscal stakes.

Here’s what the major buckets mean :

• $274.4 million in personal/business income taxes: withholding from paychecks, estimated payments, and some business-related taxes.
• $209.6 million in property taxes: paid directly by homeowners and indirectly through rent.
• $160.7 million in sales/excise taxes: paid at the register and on specific goods.
• $5.2 million in other taxes: smaller state and local categories.

Advocates argue that broader work authorization could raise compliance and withholding by bringing more wages “on the books.” One estimate says a work authorization scenario could raise the total to $850 million. That is a projection, not a guarantee.

Policy conflict also feeds the fear cycle. Massachusetts Treasurer Deb Goldberg joined officials from 15 states in a letter to Trump warning that enforcement can reduce spending and tax revenue in donor states. At the same time, legal fights are active. CEDC and national groups are suing DHS in Boston federal court over IRS data use in enforcement. CEDC is an IRS ITIN Certifying Acceptance Agent and BIA-recognized for immigration aid.

Elizabeth Sweet, MIRA Coalition Executive Director, has pointed to immigrant tax payments as support for shared services. Phineas Baxandall, Massachusetts Budget and Policy Center Interim President, has emphasized immigrants’ role in economic growth.

4) Counterarguments on fiscal impact

Critics focus on benefit use and long-run cost. The Center for Immigration Studies estimates 355,000 illegal/inadmissible migrants in Massachusetts, including 50,000 new since 2021. Estimates like these vary by method and assumptions, so comparisons can be disputed.

One claim highlights household participation in welfare programs. The estimate says nearly 60% of their households use welfare, compared with 40% of U.S.-born households. Analysts who disagree often point to differences in household composition and eligibility rules. Those rules can change who counts as a “user,” even when the person earning wages is not eligible.

The same report projects a $68,000 lifetime net fiscal cost per migrant. A lifetime estimate depends on many assumptions, including future earnings, taxes paid, health costs, and education costs over time.

Policy debates are also tied to parolee eligibility. Critics argue 2026 welfare eligibility for parolees could drive higher costs. Massachusetts also had short-term programs. A 2023 state measure provided $6 million in SNAP to 4,000 inadmissible migrant families for seven months, and it has expired.

DHS has defended broader sharing by saying that, under President Trump’s administration, the government is finally taking the necessary steps to share information across federal agencies.

5) Available tax services for immigrants (2026 season)

Start by picking the right type of help for your situation. Many families do best at free VITA-style sites or community coalitions. These programs often offer free preparation, multilingual support, and screening for common credits. Some locations also assist with ITIN applications.

Expect different service models:

1. In-person sites: good for complex document review and families with many forms.
2. Remote options: can work if you can securely send documents and handle follow-up.
3. Long appointments: some full-service visits can take 2+ hours, so bring everything.

If you need a new ITIN, ask whether the site has an ITIN Certifying Acceptance Agent. That role can reduce risk of mailing original identity documents. It may also cut down on back-and-forth.

Commercial preparers can be a fit for some families, especially for extended hours and faster scheduling. Ask direct questions before you sign anything:

• What will the total fee be, including ITIN applications?
• What language support is available?
• How is your data stored, and who can access it?
• Are you being offered a refund advance, and what are the terms?

In East Boston, H&R Block (East Boston) advertises ITIN applications, Spanish services, and refund advances up to $4,000 at 0% APR. Even with 0% APR, you should still ask about any related fees and the repayment process.

Planning matters more this year. Book early. Bring complete documents. Ask privacy questions at intake.

Key immigrant tax service providers and features for 2026

6) Filing requirements and resources for immigrants

Many immigrants must file a federal return, and many also file a Massachusetts return, depending on income and residency rules. If you worked, had taxes withheld, or received tax forms, you may need to file even if you fear you owe nothing. For an individualized answer, consult a qualified tax professional.

ITIN basics are straightforward:

1. Who gets one: people who must have a U.S. taxpayer number but cannot get an SSN.
2. What it does: lets you file and be counted on tax forms.
3. Why people seek it: to file required returns, claim eligible tax benefits, and keep consistent records.

If you already filed and now feel worried, keep your records. Save a copy of the return, W-2s or other income forms, and proof of filing. If you need to catch up, ask about prior-year returns and a plan to respond to any IRS or Massachusetts DOR notices.

For trustworthy help, stick to known channels:

• Community coalitions and nonprofit sites with clear intake practices
• Massachusetts DOR directories and state help pages on mass.gov
• LITCs (Low Income Taxpayer Clinics) if you have a dispute, a notice, or a collection issue; Massachusetts has 4 LITCs
• FindYourFunds.org for help claiming missing money and refunds

[Callout 2 — Action] How to find trusted tax help 1) Start with LITCs if you received an IRS notice or face a dispute. 2) Check mass.gov for Massachusetts DOR help and tax-preparer resources. 3) Use FindYourFunds.org to track funds you may be owed. 4) Prepare for a site visit: bring IDs, SSN/ITIN records, income forms, last year’s return, and any IRS or Massachusetts DOR letters. 5) Ask one privacy question up front: who can access your documents and how they are stored.

Trinh Nguyen, Boston Worker Empowerment Chief, has argued that accessible preparation helps families claim refunds they earned. That practical goal is colliding with fear in the 2026 season. If you plan to file, schedule a trusted appointment now and keep copies of everything you submit.

This article discusses tax and immigration policy; information reflects current context and may change with new laws or guidance. Readers should consult qualified counsel for individual decisions.

Tax-related numbers and projections are subject to methodology and should be considered illustrative or contextual rather than definitive.