Here's how it works.
Illegal immigrants cannot qualify for legitimate Social Security numbers, which would entitle them to work legally in the U.S. and file income tax returns, but the Internal Revenue Service allows them to apply for nine-digit individual taxpayer identification numbers, or ITINs, which also are used to file federal income tax returns.
In addition, a provision in the tax code permits illegals to claim "additional child tax credits," which grant families $1,000 per "dependent" child. Roughly three-quarters of tax returns filed by illegals include these ACTCs. With the ITIN, illegals are able to get tax credits and refunds for nephews, nieces and other family members who never have touched U.S. soil.
For example, an illegal immigrant who makes $13,000 a year not only pays no taxes but also can receive a refund of $5,000 by simply filling in five ACTCs. One illegal used a fake address and said four illegal aliens lived there with 20 relatives as dependents, for a grand total tax refund of $29,000!
According to the Center for Immigration Studies, in the 2010 tax year alone, more than 3 million returns were filed with ITINs. About 2.3 million of them paid no federal income taxes and also collected a cumulative $4 billion from the Treasury in tax refunds for claiming ACTCs.
FactCheck.org confirmed: "The (Treasury Department's inspector general's) report stated that more than 2.3 million persons who did not have Social Security numbers valid for working in the U.S. got an average of roughly $1,800 each in 2010 in child tax credit refunds. That included 9,000 illegal immigrants who each got a total of $10,000 or more by retroactively claiming credits for tax years prior to 2010."
A tax consultant snitched to WTHR News: "We've seen 10 (or) 12 dependents, most times nieces and nephews, on these tax returns. The more you put on there the more you get back. ... Here's a return right here: 'We've got a $10,300 refund (for) nine nieces and nephews.'"
And if you think this is a relatively new IRS scam, consider the report for the Center for Immigration Studies prepared by Peter A. Schulkin, who holds a Ph.D. in economics from Harvard University and has taught at several universities. It was a follow-up to a November 2010 memorandum titled "Child Tax Credits for Illegal Immigrants."
In it, Schulkin "highlights new information contained in a report of the Treasury Inspector General for Tax Administration (TIGTA) dated July 7, 2011, (titled) 'Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits.' The $4.2 billion is entirely the product of the Additional Child Tax Credit ... for the 2010 tax processing year."
Furthermore, Schulkin reported: "The July 7, 2011, TIGTA report echoes the message contained in the earlier March 31, 2009, TIGTA report in the statement: 'Although the law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, an increasing number of these individuals are filing tax returns claiming the Additional Child Tax Credit ... a refundable tax credit intended for working families. The payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.'"
In fact, Schulkin's memorandum reports a long history of IRS abuses of ACTCs by illegal immigrants -- at least seven years.
FactCheck.org confirmed, "By 2005, the recent IG report said, 796,000 persons without valid Social Security numbers claimed refundable child credits totaling $924 million, and in 2008, these claims had risen to 1,526,276 persons claiming $2.1 billion in refunds."
CNSNews.com reported that IRS Commissioner Douglas Shulman was asked in April about what his agency is doing to collect taxes from illegal immigrants. He replied: "It's a great question. And one of the pathways to citizenship that people believe is a good one is -- even if you're not in this country legally -- to pay taxes."
CNSNews.com additionally noted how, in 2006, Deputy Commissioner of Social Security James Lockhart said that in the year 2003 alone, 8.8 million W-2 forms had been filed on which the Social Security number and name did not match and the W-2 could not be attributed to a known taxpayer. The Social Security Administration pointed to the reason for both as "unauthorized work" being done by illegal aliens.
The words that continue to echo through my head are President Barack Obama's chastising comment about the wealthy: We all must "pay our fair share" of taxes.
Illegal immigrants' IRS abuses and theft of hardworking taxpayers' money will not cease until Congress acts. In 2011, H.R. 1956 was proposed "to amend the Internal Revenue Code of 1986 to require individuals to provide their Social Security number in order to claim the refundable portion of the child tax credit." But the legislation has had only one hearing before the House Ways and Means Committee. Why? According to FactCheck.org, "leading Democrats are resisting a bill that would stop future payments"!
Please call your representative today and say Congress needs to act immediately to stop this pilfering of the U.S. Treasury by illegal immigrants.
We all must "pay our fair share" of taxes?
And so Rome continues to burn.