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A Texas lawmaker's "simple fix" would save taxpayers $24B over a decade by cutting off unlawful workers' refunds.

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Bill Blocks Billions in Child Tax Credits to Illegal Immigrants

A Texas lawmaker’s “simple fix” would save taxpayers $24B over a decade by cutting off unlawful workers’ refunds.

New legislation sponsored by Rep. Sam Johnson (R.-Tex.) would block illegal immigrants from cashing in on the refundable child tax credit and save the federal government tens of billions of dollars.
 
“Last year illegal immigrants bilked $4.2 billion from U.S. taxpayers due to a loophole with the refundable child tax credit,” Johnson said.  “According to a new report, this rampant abuse has cost American taxpayers billions.  That’s just wrong.
 
“It’s time to close this loophole,” Johnson continued.  “With the dire need to cut government spending, I hope this simple fix gets a serious look as a way to stamp out waste, fraud and abuse.”
 
The Refundable Child Tax Credit Eligibility Verification Reform Act (HR 1956), would amend the Internal Revenue Service (IRS) code to require that taxpayers provide their Social Security number on their tax return in order to claim the refund.
 
The Congressional Joint Committee on Taxation studied Johnson’s legislation and determined that it would save at least $10 billion if the temporary tax benefit expires in 2012, and $24 billion by 2021.
 
According to the Treasury Department’s Inspector General for Tax Administration,, those working illegally in the U.S. are still required to pay taxes, and many do so using taxpayer identification numbers.  These taxpayer numbers “are issued regardless of immigration status, because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code,” the IRS says.
 
The refunds claimed by illegal immigrants have grown over the years at an alarming rate: $924 million in 2005 to $4.2 billion in 2010.
 
The mere existence of this tax credit offers “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.  Clarification is needed on this issue,” the inspector general said.
 
IRS Commissioner of the Wage and Investment Division Richard Byrd Jr. responded to the inspector’s report by saying the agency was following the law.
 
“The IRS is administering the law accordingly.  Legislative changes would be required to deny many of the claims discussed in the report,” Byrd said.

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Audrey Hudson is an award-winning investigative journalist whose enterprise reporting has sparked numerous congressional investigations that led to laws signed by Presidents George W. Bush and Bill Clinton. She won the prestigious Sigma Delta Chi award for Public Service in 2009 for her report on dangerous drug experiments by the federal government on war veterans, which prompted internal investigations and needed reforms within the Veterans Affairs Department. The report also captured first place for investigative reporting by the Washington, D.C. chapter of the Society of Professional Journalists and was a finalist of the International Academy of Digital Arts and Sciences Webby Awards for news and politics. Her breaking stories have been picked up and followed by major news publications and periodicals, including Readers Digest, Washington Monthly, and The Weekly Standard, as well as The New York Times, Wall Street Journal, USA Today, and Washington Post. With nearly 20 years of experience in Washington as a newspaper reporter and as a Capitol Hill staffer for Western lawmakers, she will now lead Human Eventsâ?? coverage of energy and environmental issues. A native of Kentucky, Mrs. Hudson has worked inside the Beltway for nearly two decades -- on Capitol Hill as a Senate and House spokeswoman, and most recently at The Washington Times covering Congress, Homeland Security, and the Supreme Court. Audreyâ??s email is AHudson@EaglePub.Co

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