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Illegal Aliens Receive Billions in IRS Tax Benefits
By James Walsh
"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.
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.
**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."
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."
Illegal Aliens Receive Billions in IRS Tax Benefits