Gov’t Audit: Illegal Immigrants Received $4.2 Billion in Tax Credits Last Year

Illegal immigrants not authorized to work in the United States received $4.2 billion in tax credits from the IRS last year, almost quadruple the amount five years ago, a government audit found.

The Treasury Inspector General for Tax Administration (TIGTA) found an increasing number of illegals are claiming a refundable tax credit meant for working families when they file their taxes. Those who claim the credit either reduce what they owe or receive refunds.

According to TIGTA, which independently oversees the IRS, this essentially provides a huge incentive for illegals to come, live and work in the U.S.:

Many individuals who are not authorized to work in the United States, and thus not eligible to obtain a Social Security Number (SSN) for employment, earn income in the United States.  The Internal Revenue Service (IRS) provides such individuals with an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns.  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 (ACTC), 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.

The $4.2 billion amount is a dramatic increase from $924 million in 2005. According to the audit, 72 percent of people who used a taxpayer identification number to file taxes last year claimed the child tax credit, up from 51 percent in 2005. Comparatively, just 14 percent of those who filed regular tax returns last year claimed the credit.

According to the Washington Post, the explosion in claims is due in part to tax law changes that reduced the number of children required to claim the credit. Additionally, the American Recovery and Reinvestment Act of 2009 also made the refund easier to get.

In response to the report, the IRS agreed to consult with the Treasury Department but said it doesn’t have the authority to stop the claims, pointing out the law doesn’t require the taxpayer or their claimant child have a Social Security number to receive the credit. Legislative changes would be required for any real change.

(h/t Hot Air)

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