People filing tax returns using Individual Tax Identification Numbers (ITINs) collected $4.2 billion in Additional Child Tax Credits (ACTC) in 2010, according to the Department of Treasury Inspector General (IG). The vast majority of people filing ITIN returns are illegal aliens who are ineligible to receive Social Security numbers (SSNs). The ACTC allows low-income earners to receive a credit of $1,000 per child, and if they owe no taxes, like virtually all illegal alien households, they get that $1,000 per child paid to them.According to the IG report, 72 percent of tax returns filed by ITIN users claimed the ACTC, compared with just 14 percent of returns filed by people using SSNs. The report, which was issued September 1, states, “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 IG’s hypothesis is borne out by the sharp increase in payouts from the Treasury under the ACTC program, rising from $924 million in 2005 to $4.2 billion last year. One of the likely reasons for the dramatic increase in ACTC claims by ITIN filers is the influence of illegal alien advocacy groups (some of which receive government funding). These groups counsel illegal aliens to file returns because doing so would be beneficial to them if amnesty were to be enacted, and to take advantage of provisions and loopholes in the tax law that allow them to receive billions of dollars from the government. In addition, it is virtually impossible for the Internal Revenue Service (IRS) to verify or disprove the existence of a dependent minor who resides outside the U.S.Even more alarming is the IRS’s laissez-faire attitude about illegal aliens claiming the ACTC. The IG notes that in 1996, Congress attempted to prevent ITIN filers from claiming the Earned Income Tax Credit (EITC) and most other public benefits by limiting them to people who file returns under a work-eligible SSN. Because the ACTC had not been created at the time, and is not specifically mentioned in the 1996 law, the IRS claims it has no choice but to dole out billions of dollars of government money to ITIN filers, absent new legislation. That position was explicitly rejected by the IG.
FAIR: Treasury Department Says Illegal Aliens Collect Billions in Tax Credits