Skip to comments.Will lawmakers act to close tax loophole [tax credits] for illegal immigrants?
Posted on 05/08/2012 2:27:59 PM PDT by thouworm
An undocumented worker in southern Indiana told 13 Investigates just how easy it truly is.
He said four other illegal immigrants file tax returns using his address, even though none of them actually lives there. And he said this year, those four workers filed tax returns claiming 20 children live inside his small trailer home. As a result, the IRS sent the illegal immigrants tax refunds totaling more than $29,000.
But none of the 20 children listed as dependents on the tax returns lives in Indiana or even in the United States.
"No, they don't live here," admitted the undocumented worker, who lives with his young daughter. "The other kids are in their country of origin, which is Mexico."
(Excerpt) Read more at wthr.com ...
The law has been clear for over a decade that eligibility for these credits does not depend on work authorization status or the type of taxpayer identification number used. Any suggestion that the IRS shouldn't be paying out these credits under current law to ITIN holders is simply incorrect. The IRS administers the law impartially and applies it as it is written.
If the law were changed, the IRS would change its programs accordingly. The IRS disagrees with TIGTA's recommendation on requiring additional documentation to verify child credit claims. As TIGTA acknowledges in this report, the IRS does not currently have the legal authority to verify and disallow the Child Tax Credit and the Additional Child Tax Credit during return processing simply because of the lack of documentation. The IRS has procedures in place specifically for the evaluation of questionable credit claims early in the processing stream and prior to issuance of a refund. The IRS continues to work to refine and improve our processes.
This is the first part of WTHR's 2-part article:
INDIANAPOLIS - Why are many illegal immigrants getting a bigger tax refund than you? Blame it on the IRS and a massive tax loophole that's now being exposed by Eyewitness News.
13 Investigates has found the IRS is giving away your tax dollars to illegal workers and people who don't even live in the United States - and the problem is costing billions!
We want you to see exactly where your money is going and why the IRS is allowing it to happen. From the homes of illegal workers in Indiana to the headquarters of the Internal Revenue Service in Washington, investigative reporter Bob Segall takes you behind the scenes of his three-month investigation to get answers.
Illegal aliens working in the United States are technically required to fill out a tax return and pay their income taxes. We all laugh about claiming a additional deduction here or there for some neighborhood kid who eats the food out of your fridge and hangs out at your house all the time, but many of these workers are claiming deductions for children living in Mexico.
Each spring, at tax preparation offices all across the nation, many illegal immigrants are now eagerly filing tax returns to take advantage of a tax loophole, using their ITIN numbers to get huge refunds from the IRS.
The loophole is called the Additional Child Tax Credit. Its a fully-refundable credit of up to $1000 per child, and its meant to help working families who have children living at home.
But many undocumented workers are claiming the tax credit for kids who live in Mexico lots of kids in Mexico.
Weve seen sometimes 10 or 12 dependents, most times nieces and nephews, on these tax forms, the whistleblower said. The more you put on there, the more you get back.
The magnitude of the problem has grown exponentially, said Russell George, the United States Department of Treasurys Inspector General for Tax Administration (TIGTA).
And he says the IRS has known about the problem for years.
Watch the newscast video and stay calm!
TV investigation uncovers.....2 million illegal aliens collecting 4 billion in tax credits for dependent children living in Mexico
When the author of the audit states an increasing number of illegal immigrants are claiming the ACTC, hes not kidding. Claims for the credit have increased five-fold, from $924 million in 2005 to $4.2 billion last year.
The IRS says it doesnt have the authority to disallow the claims. Apparently, the law doesnt explicitly forbid unauthorized workers from claiming the tax credit, so the IRS just has to dole it out. And recent changes to tax law have made the refund even easier to obtain.
"Changes to tax law are partly to blame for the explosion in refunds for additional child tax credits in recent years, auditors found. Before 2001, filers needed to have three or more children to qualify and to owe more Social Security taxes than earned income credits."
"But those requirements have been eliminated and the allowable refund for each child doubled. The American Recovery and Reinvestment Act of 2009 also made the refund easier to get, auditors found."
I doubt anything is done.
I read somewhere, several years ago that illegal aliens were collecting Social Security retirement benefits and disability benefits on illegal work performed in the US. And these benefits are mailed to the illegals at their Mexico or other foreign addresses. The article, as I recall, said the Social Security office whish sends checks, has a huge foreign nation bank of addresses. Can anyone here verify??
“He says many illegal immigrants are claiming the tax credit for children who’ve never lived in this country,”
If the dependent children never lived in the USA, how could they have social security numbers? Were the SSN’s stolen? If that is the case, those people should be deported after they serve a long prison sentence.
“using their ITIN numbers to get huge refunds from the IRS.”
see links in post 2 for fuller explanation.
The guys protecting agricultural interests had this category of folks (low income with EITC) jacked up to 30% ~ with a 100% audit on students getting subsidized loans.
No additional resources were given to IRS so that had the auditors working over these things endlessly while letting people like Senator Kerry skate regularly.
Not likely the guys protecting cheap labor will allow a law change, but they will offer higher audits like they always do.
Keep your eyes open for who does that. They are the "class enemy" (to borrow a phrase).
Just gearing up for next year.
LucyT: This thread in the second part of the WHTR investigation on the child tax credits for illegals---even when the children live in Mexico.
I was going to post this info on the thread IRS may issue $26 billion in fraudulent tax refunds, watchdog tells Congress, but there was just too much and actually unrelated because the IRS claims this is LEGAL!
Executive Summary: Nope, not while the same illegals can still vote. John Stuart Mills had an interesting theory that you shouldn't let people who received money from the government to vote. It's an interesting idea in our modern world.
Yesterday I called my two senators and one representative and asked what their position was on the pillage of the U. S. treasury. Today I got a call from my reps office stating that he had signed on as a sponsor of legislation to close this loophole in the tax law. Haven’t heard from either one of my senators.
We have become a confederacy of dunces.
The question begging to be asked and answered is could a citizen with a social security number get the same opportunity, or was this limited only to illegal immigrants with a number other than a social security number. If so, how in the heck did this happen and why. Couldn’t possibly be to buy votes, legal or otherwise. No way!
If anything is done, it’ll give them more tax dollars. Illegals have rights, don’cha know.
My Congressperson Sue Myrick (NC) said on the radio today that the Congress is so backed up with proposed laws to address this and many other things that they are just going to wait until after the election. Say what?
This thread in the second part of the WHTR investigation on the child tax credits for illegals---even when the children live in Mexico.
Check out article, also # 2, and link at # 9.
Thanks, thouworm. Good work.
Do fish live in the forest??
Thanks for the ping.
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