Critics say midlevel IRS bureaucrats continue to abuse the Additional Child Tax Credit program by dispensing $1,000 checks to families in this country illegally.
“The law needs clarification that undocumented immigrants are not eligible,” Sen.Charles Grassley, R-Iowa, told Watchdog.org in a statement.
To make Congress’ intent clear – that only legal U.S. residents are entitled to ACTC credits — Grassley co-sponsored a clarifying amendment with Sen. Mike Enzi, R-Wy.
“Unfortunately, the majority leader (Harry Reid, D-Nev.) cut off debate, so we weren’t given the chance to offer our amendment,” said Grassley, the top Republican on the Senate Judiciary Committee.
The IRS’ practice of paying out billions to undocumented-immigrant families never received full congressional scrutiny, said David North, a fellow at the enforcement-oriented Center for Immigration Studies.
“I’ve been in government and I know kind of how these things work out,” North told the Washington Times.
“It struck me that (GS) 15s and 16s got together at some point and decided this is how we should handle it, and it stuck,” said North, who wrote “Paying Illegals to Stay,” an analysis of how benefit programs increase illegal immigration.
The IRS has said it doesn’t believe the ACTC law allows the agency to deny payment to undocumented immigrants.
I reported in June that disbursement of ACTC credits has grown rapidly — and suspiciously — with increased issuance of Individual Taxpayer Identification Numbers as substitutes for Social Security numbers.
ITIN holders are not required to prove legal residency, and ITIN applications are running at the rate of 1 million a year.
Federal investigators identified one address in Atlanta where 23,994 ITIN refunds totaling $46,378,040 were delivered. A single bank account there received 8,393 refunds.
Records indicate that undocumented immigrants in Virginia received $87.9 million in ACTC cash from the IRS. Watchdog reported that $163,711 went to a single address in the tiny eastern shore town of Parksley.
In lightly populated Iowa, Grassley’s home state, undocumented immigrants got an estimated $30 million.
With an average of 15 percent of ACTC refunds directed to undocumented households nationally, North calculates that roughly half of the money went to ITIN holders who paid “little or no income taxes.”
An audit by the Treasury Inspector General for Tax Administration stated:
We believe legislation is needed to clarify whether or not refundable tax credits such as the ACTC may be paid to filers without a Social Security number. Such a legislative change could result in cost savings to the federal government of $1.8 billion annually.
As it now stands, the payment of federal funds through this tax benefit appears to provide additional incentive for aliens to enter, reside and work in the U.S. without authorization, which contradicts federal law and policy to remove such incentives.
The recommendations of that audit, conducted in 2009, have yet to be acted on.
Meantime, the IRS continues to be dogged by controversy over its handling of tax-exempt requests by tea party groups and other conservative organizations.
Judicial Watch this month filed a Freedom of Information lawsuit against the agency asking the District Court for the District of Columbia to compel the IRS to produce records of all communications relating to the review process for organizations seeking 501(c)(4) non-profit status since Jan. 1, 2010.
On May 14, the Treasury inspector general concluded the IRS had singled out groups with conservative-sounding terms such as “patriot” and “tea party” in their titles when applying for tax-exempt status.
Cross-posted at Watchdog.org.