Terry Jeffrey

Sen. Charles Schumer, D-N.Y., and Sen. Marco Rubio, R-Fla., both said the immigration bill they helped push through the Senate was designed to "bring people out of the shadows."

Yet, if illegal aliens are truly in the shadows, why has the Internal Revenue Service been able to find enough of them to pay them more than $14 billion in refundable tax credits?

For well over a decade, the treasury inspector general for tax administration (TIGTA) has been pointing to the numerous problems the IRS caused when it made a bureaucratic decision to essentially amnesty illegal aliens for tax purposes and to decline to provide information it has about illegal aliens to federal immigration authorities.

In 1996, President Clinton signed a law requiring federal agencies to share information about illegal aliens with federal immigration authorities. "The Illegal Immigration Reform and Immigration Responsibility Act of 1996 (the Illegal Immigration Reform Act), states that information concerning illegal alien status should be provided to the Immigration and Naturalization Service (INS) notwithstanding any other law," TIGTA explained in a 1999 audit report.

TIGTA insisted on bolding the word "notwithstanding."

But that same year, the IRS issued a new regulation creating what it called Individual Taxpayer Identification Numbers (ITINs). The IRS would issue ITINs to two classes of people not qualified to receive Social Security Numbers: 1) aliens living outside the United States who nonetheless had a U.S. tax liability and 2) aliens living inside the United States who were not authorized to work here but who nonetheless owed U.S. taxes.

Those in the latter group who filed W-2s claiming income from employment in the United States were by definition illegal aliens.

The IRS said ITINs would be covered by Section 6103 of the Internal Revenue Code, which requires the IRS to maintain the confidentiality of tax return information. "The IRS provides disclosure protection to illegal alien applicants," explained the IG, who determined that conflicted with the immigration law Clinton had signed.

"IRS management and the Office of Disclosure Litigation indicated that the IRS intentionally will not provide the information to the INS," said the IG. "The rationale for this policy is that the Illegal Immigration Statute is a 'general' statute and does not change IRC Section 6103. ... This IRS policy, to 'legalize' illegal aliens, seems counterproductive to the Immigration and Naturalization Service (INS) mission to identify illegal aliens and prevent unlawful alien entry," said the IG.


Terry Jeffrey

Terence P. Jeffrey is the editor-in-chief of CNSNews

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