I thought the Feds could walk in at anytime and demand documents, of course business owners don't have to immediately comply unless there is a court order, but they can't put it off for long and it is really hard to come up with convincing documentation for all your employees in a couple of days, especially the ones who may have left.
Sometimes the fake documents people come up with are really bad photocopies other time they are so good you can't tell the difference, but there is no question when you get that letter from the IRS asking for verification on a social.