Illegal Immigrants Could Receive $7 Billion In Tax Credits

[Teddy B 17,251]

TeddyB - back to post #1 - there was a news report on TV during tax season this year, covering this exact same issue, and was talked about here at VJ in some length. Old News, I'm afraid.

IMO, it starts with identity theft (get a SSN that isn't yours) and ends with the SSA's inability to vette a SSN when the IRS is processing a tax return. In between, is the 'assigning of children' for a headcount, on the Tax Return.

Seeing I wasn't posting here last tax season, I would have no idea of knowing that this issue had been talked about previously, but thanks for the heads up.

Your opinion would be wrong, it does not have anything to do with identity theft, if you read the article, you would know that. Perhaps a second go around on this "old issue" would help you understand it better.

Edited August 23, 2012 by Teddy B

[Teddy B 17,251]

Of course anyone can file a tax return without having paid any taxes.

However, the article refers to "$7 billion" in potential tax credits. This begs the question: how many illegals have actually filed tax returns and received "free money" ? Is there any actual data on this ?

From the second article:

Undocumented workers filed 3.02 million tax returns in 2010. 72% of those returns (2.18 million) claimed the additional child tax credit.

[rocks 494]

Unfortunately the only source for this story is Fox. I wouldn't trust these figures, sounds like scaremongering to me.

[DaveE 178]

Unfortunately the only source for this story is Fox. I wouldn't trust these figures, sounds like scaremongering to me.

How about the Inspector Generals Report from the Treasury department?

Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits

Treasury Department Report

Edited August 23, 2012 by DaveE

[Teddy B 17,251]

Unfortunately the only source for this story is Fox. I wouldn't trust these figures, sounds like scaremongering to me.

The second article I posted which confirms the Fox article is from an NBC affiliate that did an undercover investigation about this.

Rocks, Fox is no worse than CNN, NBC, CBS, ABC, etc, they all have their moments. It's up to us to decypher the fact from fiction.

[rocks 494]

The second article I posted which confirms the Fox article is from an NBC affiliate that did an undercover investigation about this.

Rocks, Fox is no worse than CNN, NBC, CBS, ABC, etc, they all have their moments. It's up to us to decypher the fact from fiction.

I didn't see the second article, I'll check it out. As a rule, I don't trust stories that only have one source. Why isn't the media all over this?

[PalestineMyHeart 1,897]

From the second article:

Ty... but it still doesn't give figures for how much cash was doled out to illegals. It just gives figures for how many illegals filed, and how many claimed the credit.

Anyway, I went to the original 2011 TIGTA report (Treasury Inspector General for Tax Administration) cited in the 2nd article, and it says:

TIGTA recommended that the IRS work with the Department of the Treasury to seek clarification on whether or not refundable tax credits may be paid to individuals who are not authorized to work in the United States. TIGTA also recommended the IRS require individuals filing with ITINs and claiming the ACTC to provide specific verifiable documentation to support that their dependents meet the qualifications for the credit, including residency, and that questionable Child Tax Credit (CTC) and ACTC claims on ITIN returns **********2(f)*******************************. The IRS should also notify taxpayers when their SSNs are compromised and ensure that software packages do not auto-populate an ITIN onto Wage and Tax Statements.

IRS management agreed to discuss with the Department of the Treasury the issue of ITIN filers’ ACTC eligibility. The IRS did not agree to require additional documentation to support CTC and ACTC claims on ITIN returns ********************2(f)************************************************************************************ The IRS is exploring options to alert taxpayers whose SSNs have been compromised and plans to address software that auto-populates an ITIN onto Wage and Tax Statements and take sanctions for noncompliance.

So the IRS is aware of the situation, and refused to do anything about it (as in requiring additional documentation that claimants are actually eligible for the Child Tax Credit.)

If it's so easy for illegals to do this, then I would suspect that there are even more "legal" residents who are doing the same thing. Even prison inmates have been able to get away with running these types of scams for years.

Of course the potential $7 billion would be a lot of money. And I'm outraged about anyone who cheats on their taxes. But even $7 billion is apparently "a drop in the bucket" compared to the mountains of dough the IRS isn't collecting:

An estimated $400 billion to 500 billion in taxes go uncollected every year in the United States because of tax evasion and noncompliance.

Illegals are an easy target. But, not surprisingly, tax cheating by the wealthy make the estimated $7 billion that illegals might be able to get look like chump change:

The United States loses some $100 billion more in tax revenues annually because of offshore tax abuses by wealthy individuals and corporations.

http://www.americanprogress.org/issues/open-government/news/2011/07/13/9958/budget-bullets-the-tax-gap/

One thing I guess we can all agree on: the IRS is pathetically ineffective.

[Teddy B 17,251]

I didn't see the second article, I'll check it out. As a rule, I don't trust stories that only have one source. Why isn't the media all over this?

The second article is much better than the Fox article and it goes into much greater detail. As to why the rest of the media isn't on this, my guess is because most of the mainstream media outlets tend to keep their distance from reporting on illegals, or "undocumented workers".

[Teddy B 17,251]

Ty... but it still doesn't give figures for how much cash was doled out to illegals. It just gives figures for how many illegals filed, and how many claimed the credit.

Anyway, I went to the original 2011 TIGTA report (Treasury Inspector General for Tax Administration) cited in the 2nd article, and it says:

So the IRS is aware of the situation, and refused to do anything about it (as in requiring additional documentation that claimants are actually eligible for the Child Tax Credit.)

If it's so easy for illegals to do this, then I would suspect that there are even more "legal" residents who are doing the same thing. Even prison inmates have been able to get away with running these types of scams for years.

Of course the potential $7 billion would be a lot of money. And I'm outraged about anyone who cheats on their taxes. But even $7 billion is apparently "a drop in the bucket" compared to the mountains of dough the IRS isn't collecting:

Illegals are an easy target. But, not surprisingly, tax cheating by the wealthy make the estimated $7 billion that illegals might be able to get look like chump change:

http://www.americanprogress.org/issues/open-government/news/2011/07/13/9958/budget-bullets-the-tax-gap/

One thing I guess we can all agree on: the IRS is pathetically ineffective.

Tax fraud is so widespread we will never know what the real numbers are. But one number that stuck with me from the 2nd article is the over 3 million "undocumented workers" that filed their taxes. Just imagine what those 3 million jobs would do to the US unemployment rate if they were being done by people who are here legally.

[rocks 494]

The second article is much better than the Fox article and it goes into much greater detail. As to why the rest of the media isn't on this, my guess is because most of the mainstream media outlets tend to keep their distance from reporting on illegals, or "undocumented workers".

I read it, it was certainly an interesting read. If this is true, it is very puzzling.

I wish the mainstream media would stop talking about Romney and Ryan and talk about real news.

[PalestineMyHeart 1,897]

Tax fraud is so widespread we will never know what the real numbers are. But one number that stuck with me from the 2nd article is the over 3 million "undocumented workers" that filed their taxes. Just imagine what those 3 million jobs would do to the US unemployment rate if they were being done by people who are here legally.

I think it could help the unemployment rate.

But would 3 million more jobs offset the $400-500 billion that the IRS isn't collecting due to tax cheaters ? If my math was right, that means each job would have to generate $16,000 a year in federal taxes (on average.) Somehow I don't think the 3 million jobs saved would add up to that kind of money in taxes.

It would seem more effective to first close the loopholes on those members of the wealthy who are robbing the IRS blind, and try to rake in some of that $100 billion they aren't paying.

[Teddy B 17,251]

I think it could help the unemployment rate.

But would 3 million more jobs offset the $400-500 billion that the IRS isn't collecting due to tax cheaters ? If my math was right, that means each job would have to generate $16,000 a year in federal taxes (on average.) Somehow I don't think the 3 million jobs saved would add up to that kind of money in taxes.

It would seem more effective to first close the loopholes on those members of the wealthy who are robbing the IRS blind, and try to rake in some of that $100 billion they aren't paying.

No, it definitely would not offset the $400-$500 billion, but it's a step in the right direction. Whether they are rich or illegal, a tax cheat is a tax cheat, and they should all be stopped.

[rocks 494]

No, it definitely would not offset the $400-$500 billion, but it's a step in the right direction. Whether they are rich or illegal, a tax cheat is a tax cheat, and they should all be stopped.

Tax cheating seems to be "legal". Look at all those commercials for tax attorneys that can "resolve your tax debt". If someone owes taxes, why shouldn't they pay them? I pay mine...

[Teddy B 17,251]

Tax cheating seems to be "legal". Look at all those commercials for tax attorneys that can "resolve your tax debt". If someone owes taxes, why shouldn't they pay them? I pay mine...

Those commercials get under my skin. Those lawyers should not be allowed to advertise on tv, just like tobacco companies can't. While we're at it, throw in the damn ambulance chasers too.

[rocks 494]

Those commercials get under my skin. Those lawyers should not be allowed to advertise on tv, just like tobacco companies can't. While we're at it, throw in the damn ambulance chasers too.

They shouldn't be allowed at all! If someone owes taxes, why should they not pay them? If they owe $10,000+ in taxes, they should be able to afford to pay it. I can't imagine paying that much in taxes.