The IRS is a pretty intimidating organization because no one gets between the government and its money. This is why the fines and jail time is so high when compared to other crimes. Consider the fact that a business who hires someone illegally is probably not reporting that employees existence to anyone. That means that they are not reporting accurate information to the IRS. This in itself may not be a big deal but if the business can successfully and willfully hide this information from the government then what else can it hide? The IRS might find a treasure trove of deliquent tax dodgers by auditing businesses that hire illegals in this country.
The IRS already knows which filers are illegal. They don't care. They are well aware of Social Security numbers being used by more than one person, so is the SS administration.
Neither can or will notify individuals or employers when they see evidence of an illegal alien employees. The SS administration was stopped from notifying people when their numbers were stolen and they were stopped from notifying employers who had employees with mismatched names/numbers or using someone's identity.
So, yes the IRS, along with the SS administration, could easily determine that illegal aliens or other criminals are working for companies and they could report them to authorities but they won't.
In some cases, the illegal aliens are paying taxes under their stolen identity. Guess what? The government doesn't give a shit where money comes from and are just happy to get their filthy hands on it. If some citizens get hurt by this, they figure it's a small price to pay.
Immigration laws are not upheld. Illegals can sign up for Obamacare. Illegals get all sorts of benefits and even in-state tuition for many colleges. The government invites them here by advertising the benefits, and those ads run in Mexico.
Why would they bother to try and catch them after they've done everything they can think of to get them here? I'm sure they might try and fine some employers for hiring them, not because they care about law but because it's just another way to get more money.
I'm not even sure companies are still allowed to ask if potential employees are legal citizens. That is becoming taboo. Some that have been caught using other people's identities didn't get in trouble because they claimed they didn't think they were doing anything wrong. Yea, right. They knew they weren't using their names and numbers, so they knew they breaking laws. It's almost like it's considered a right for them. Our own government does little or nothing for the citizens who fell victim to identity thieves. Local cops can't do anything because it's a federal matter. When the feds don't care, nothing changes.