Illegal Aliens Receive Billions in IRS Tax Benefits

Friday, 23 Sep 2011 05:17 PM

By James Walsh

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On July 7, 2011, the U.S. Department of Treasury's inspector general for tax administration issued a startling report entitled “Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits.”

No wonder the nation’s finances are in turmoil.

According to the Treasury report, foreign nationals not authorized to work in the United States and ineligible for a Social Security Number (SSN) are nevertheless receiving government help from the Internal Revenue Service (IRS). The IRS currently issues undocumented aliens an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns.

Many illegal workers are paid in cash “under the table” and thus file no tax forms at all; but a number of undocumented workers, according to the Treasury report, are receiving public benefits contrary to federal and state laws.

For example, the Child Tax Credit (CTC) and the Additional Child Tax Credit (ACTC) allow payment of federal funds as tax benefits to undocumented aliens. Add to these the Earned Income Tax Credit (EITC), and the result is tax refunds that provide incentives for foreign nationals to enter, reside, and work in the United States without authorization and in violation of current U.S. immigration law.

The CTC, ACTC, and EITC have come under review because of the significant volume of Individual Taxpayer Identification Number (ITIN) returns filing for these credits using fraudulent data, such as names and SSNs.

The Treasury report notes that the American Recovery and Reinvestment Act of 2009 (ARRA) temporarily increased ACTC eligibility by changing the income threshold for calculating the credits in 2009 and 2010. The result was that in 2010, undocumented alien (ITIN) filers were able to claim higher tax refunds that totaled $4.2 billion. They represent an increase from $924 million in 2005.

It is clear that unauthorized aliens are filing ITIN tax returns with fraudulent data. The Treasury report found that “One common type of fraudulent refund involves taxpayers fabricating a Wage and Tax Statement (Form W-2) that shows excess withholding and results in a tax refund.”

Street-smart illegal immigrants are wise to the federal government’s incompetence.

Making matters worse, the U.S. Department of the Treasury, Accounts Management Taxpayers Assurance Program (AMTAP) has failed to take steps to notify U.S. taxpayers when it is obvious that their SSNs and names have been compromised.

The Treasury Report found “sufficient evidence” that the IRS took no steps to notify legitimate taxpayers that their SSNs, and sometimes their names, were used by undocumented aliens filing tax returns on regular or ITIN tax returns.

The Child Tax Credit (CTC) benefit also is being fraudulently used by illegal aliens.

The Treasury Report indicates that the IRS will discuss amending the Tax Code to limit eligibility for the CTC and ACTC. Meanwhile, in reply to suggestions of misfeasance, the IRS answers that the agency does not have the legal authority to verify and disallow CTC and/or ACTC applicants as to their qualifications including their residency claim.

Meanwhile, over at the White House, President Barack Obama’s two years and nine months in office have seen a rapid decline in his approval ratings with regard to proposed programs and job performance. At the top of the list is widespread disappointment at his promised immigration reform and border control that have yet to come to pass.

The failure of the federal government to control the borders not only means lost jobs, escalating healthcare costs, escalating criminal justice costs including victim costs, educational costs, welfare costs, and now fraudulent tax refund costs.

Immigrant advocates promulgate the myth that illegal aliens are simple souls in need of government assistance. In actuality, illegal aliens, despite their level of education, have become experts at taking the U.S. government for all its worth.

President Obama’s immigration gyrations range from providing undocumented aliens with billions in tax refunds to promising U.S. citizens an emphasis on deportations.

In place of immigration reform, the president has chosen a re-election gimmick that authorizes by bureaucratic fiat “prosecutorial discretion” to be exercised by government immigration lawyers in halting the deportation of illegal aliens in deportation/removal proceedings.

A bewildered citizenry is witnessing a White House form of bureaucratic amnesty!

Yet the nation grows uneasy with Obama campaign promises that fail to materialize. Citizens and non-citizens alike have yet to know precisely where the president stands or what he means when he orates, leaving many to conclude that “Obama speaks with forked tongue.”



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