Monday, October 14, 2013

Your IRS At Work - Billions In Tax Credits to Illegal Aliens

This is an old story to regular readers of Joshuapundit, but a new survey from the Center for Immigration Studies puts into perspective on how widespread and costly the bilking of the U.S. treasury via bogus tax credits give to illegal aliens is:

The report, written by CIS fellow David North, says the Internal Revenue Service doled out $4.2 billion in what is known as the “additional child tax credit” in 2010 to those using an individual taxpayer identification number, or ITIN, which is usually a signal of an illegal immigrant.

The issue has been known for some time. But Mr. North went deep into the data to try to look at why it’s happening, and said it’s a story of a tax credit expanding beyond its initial scope, and midlevel IRS managers twisting the law, leaving billions of dollars going to illegal immigrants.{...}

Nobody was answering the phones at the IRS during the government shutdown, which began Oct. 1.

But the agency in the past repeatedly has said it doesn’t believe the law allows it to deny illegal immigrants the tax credit, and also disputes that it has the legal authority to deny claims even when they aren’t backed up by documents showing that the children actually live in the U.S.

“The IRS does not have the legal authority to deny credits during processing when documentation is not provided,” the agency told its inspector general in 2011.

The “additional child tax credit” was created to help out those who make too little to qualify for the full child tax credit. The ACTC is refundable, meaning that even if the taxpayer doesn’t owe income tax, he or she could get a payout the IRS.

That becomes an avenue for fraud, particularly when combined with illegal immigrant workers, whose use of the tax credit has jumped from 796,000 filers in 2005 to 1.5 million in 2008 and 2.3 million in 2010, according to the IRS‘ official auditor.

Investigators identified one address in Atlanta where 23,994 ITIN-related tax refunds were sent — including 8,393 refunds deposited to a single bank account. Mr. North said those were pretty good indications of fraud.

He said the IRS should also look for cases where an ITIN filer goes from claiming no dependents to claiming four or five dependents the next year.

Mr. North used an auditor’s report to identify a town in Delaware and another on Virginia’s Eastern Shore with large concentrations of ITIN filers.

Frankford, Del., had one address where 627 ITINs were registered — despite the town having a population of just 862. Parksley, Va., had a single address with 100 ITINs registered, in a town of 847 residents.

Why people with no legal right to be in America should even be able to get Employer Identification Numbers (EINs) or ITINs is something no one want to talk about.

And it's not just bogus child credits. Another widespread fraud that is practiced by illegal aliens aside from bogus child credits is bogus filing for the earned income credit, another billion dollar giveaway.You see, a lot of illegal migrants do 'pay' taxes of a sort.

After obtaining an ITIN (individual tax ID number) from the IRS, once known as an EIN (employer identification number) and limited to business owners with employees but now available to anyone for the asking, all an illegal alien needs to do is to use a bogus social security number for work purposes. When tax time comes along he or she  simply tell his tax preparer to write a letter stating that all earnings credited to the social security number in question actually refer to the ITIN, and then apply for an Earned Income credit.  Fraud is rampant.

I disagree with the report's conclusion that this is merely the work of some mid-level bureaucrats. Anyone who has worked in government knows people at that level don't originate policy but simply carry out the orders of higher ups.

All this, of course, reveals another dirty little secret - that the IRS knows exactly where a lot of the illegal migrants can be found, but are choosing (or more likely being ordered) not to cooperate with ICE in enforcing U.S. immigration laws.

Instead, they're busy persecuting the Obama Administration's political enemies and denying 501c status to conservative political groups.

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