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发帖数: 4704 | 1 Unauthorized U.S. Workers Claim $4.2 Billion in Tax Credits (1)
2011-09-01 16:21:33.428 GMT
(Updates with details on report and comment by Inspector General and
IRS beginning in fifth paragraph.)
By Andrew Zajac
Sept. 1 (Bloomberg) -- Tax filers who were not authorized to work in
the U.S. collected $4.2 billion in tax credits in 2010, a Treasury
Department watchdog reported.
Although federal law prohibits people residing illegally in the U.S.
from receiving most public benefits, an increasing number filed tax returns
claiming the additional child tax credit intended for working families,
according to the report released today by the Treasury Inspector General for
Tax Administration, J. Russell George.
“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 report said.
The recipients didn’t qualify for Social Security numbers and filed
tax returns using individual taxpayer identification numbers supplied by the
Internal Revenue Service.
The additional child tax credit was established in 1997, one year after
Congress explicitly restricted eligibility for other benefits to taxpayers
with Social Security numbers.
Social Security Numbers
The law authorizing the child tax credit didn’t specifically limit
recipients to holders of Social Security numbers. The IRS has taken the
position that it doesn’t have the authority to deny the benefit to people
who file with a taxpayer identification number.
“Clarity is needed on this issue,” George said in a statement
accompanying today’s report. “The Internal Revenue Service should work
with the Department of Treasury to clarify whether this credit, which is
based on earned income, should be paid to those who are not authorized to
work in the United States.”
George recommended that the IRS require additional documentation from
unauthorized workers proving that their children meet eligibility
requirements for the credit, including residency.
In a reply to George’s report, the IRS said it agreed to discuss the
issue of filers’ eligibility for the credit with Treasury. The IRS didn’t
agree to require additional documentation from unauthorized workers, saying
it doesn’t have authority to do so short of a formal examination process.
Work Authorization Status
In a further statement on the report, IRS spokeswoman Michelle Eldridge
said that “the law has been clear for over a decade that eligibility for
these credits does not depend on work authorization status or the type of
taxpayer identification number used.”
“The IRS administers the law impartially and applies it as it is
written,” she said. “If the law were changed, the IRS would change its
programs accordingly.”
Even income earned illegally in the U.S. is subject to taxation.
Identification numbers are provided so that workers can comply with tax laws
even if they don’t have the work authorization necessary for a Social
Security number.
The average amount claimed per single return from filers using tax
identification numbers in 2010 was about $1,800, according to the report.
The total amount of refunds for additional child tax credits processed in
2010 was $28.3 billion.
George also reported that documentation associated with filings by
those with taxpayer identification numbers sometimes include fabricated or
stolen Social Security numbers.
George urged the IRS to contact taxpayers whose Social Security numbers
have been compromised, something it doesn’t now routinely do.
The IRS said it is increasing efforts to combat identity theft. It didn
’t commit to a notification policy.
--Editors: Jodi Schneider, Laurie Asseo
To contact the reporter on this story:
Andrew Zajac in Washington at +1-202-654-7317 or a****[email protected]
To contact the editor responsible for this story:
Mark Silva at +1-202-654-4315 or
m******[email protected] |
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