Home / Taxes / IRS Refunds $4.2 Billion to Illegal Aliens for Taxes Not Paid
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IRS Refunds $4.2 Billion to Illegal Aliens for Taxes Not Paid

Written by Gary North on August 15, 2012

You read that right. It turns out that illegal aliens are required to file with the IRS. They got paid (illegally), but it is illegal for them not to file. Their employers did not file, since it was illegal to hire them.

The illegal aliens have children. Each child is worth $1,000. This is a tax credit. But the illegal aliens sometimes have more tax credits than wages. So, the IRS issues them checks for the difference.

Do you follow this so far?

Some illegal aliens have figured out that they can claim more kids than they have. No one at the IRS looks into this. So, the IRS pays. The estimate is that it shelled out $4.2 billion in fiscal year 2010 based on fraudulent returns. This appeared in a Treasury Department report issued in July 2011.

You have to see the original of this report. You would not believe it if you could not see it. This is a masterpiece of government reporting and typesetting.

The report goes on. Try to follow it. I dare you. It covers a 1996 law that prohibits refund payments to workers who do not submit a Social Security number. Illegal Aliens do not have one. So, earned income tax credits (EITC) are not to go to them. They file with a different number, the ITIN. Furthermore, the report says, “the same law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, with the exception of certain emergency services and programs.” Clear? Not to the IRS.

Nonetheless, IRS management’s view is that the law does not provide sufficient legal authority for the IRS to disallow the ACTC to ITIN filers. In addition, the Internal Revenue Code does not require an SSN to claim the ACTC and does not provide the IRS math error authority to deny the credit without an examination. As such, the IRS continues to pay the ACTC to ITIN filers.

But what is the ACTC? I thought you’d never ask.

The ACTC is the refundable portion of the Child Tax Credit (CTC). The CTC can reduce an individual’s taxes owed by as much as $1,000 for each qualifying child. The ACTC is provided in addition to the CTC to individuals whose taxes owed were less than the amount of CTC they were entitled to claim. The ACTC is always the refundable portion of the CTC, which means an individual claiming the ACTC receives a refund even if no income tax was withheld or paid. As with all refundable credits, the risk of fraud for these types of claims is significant.

Result? About $4.2 billion in refunds on taxes never paid.

The Treasury issued this report. Result? Nothing.

It gets worse, according to this assessment.

More than 2 million illegal workers claimed the credit in 2010, a 46 percent increase over 2008. The government paid out $4.2 billion to illegal filers, double 2008’s $2.1 billion price tag.

The child tax credit is one of the most popular loopholes to exploit, according to the report.

“[Immigrant] filers are much more likely to claim the [child tax credit] than other individual taxpayers,” it stated. “We found that in Processing Year 2010, 72 percent of all [immigrant] filers claimed the [child tax credit], while only 14 percent of non-[immigrant] filers claimed the [child tax credit].”

The credits are also hotbeds for fraud. The IG analyzed 250 potentially fraudulent returns from fiscal year 2009 and found that 91 percent of illegal workers claimed the credit, totaling about $570,000.

The IRS has sought legislation that would block illegal workers from receiving tax credits—a solution the latest IG report reiterated. In May, Senate Majority Leader Harry Reid (D., Nev) blocked a Republican attempt to implement those recommendations.

And so it goes. The tax system is a maze that resembles the looking glass that Alice went through.

The people who run this system think they are needed to make the free market run more efficiently, and also to be fair.

Continue Reading on www.treasury.gov

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19 thoughts on “IRS Refunds $4.2 Billion to Illegal Aliens for Taxes Not Paid

  1. When the system is a broke(n), corrupt and far-fetched as this, the best thing to do is let it collapse and build a better one in its place.

  2. Don't merely let it collapse, END IT….Where is Tim Geithner; apparently he's not "minding the store" AND the Illegals and/or their country of origin should be paying us for the time they're here BEFORE we kick them out. Does anyone really think Romney won't be any better than the idiot we have in the WH now?

  3. delmar jackson says:

    This fraud, which has been reprted annually for TEN YEARS, causes more than economic loss. when law abiding citizens see others breaking the law with impunity, they are made to feel like SUCKERS! How long before normal law abiding citizens start cherry picking which laws they think they should obey.?
    I don't blame any immigrant for doing this. Goodbye America. hello Mexifornia.

  4. Patriot1776 says:

    If you enjoy providing illegal aliens thousands of your tax dollars, continue to allow democrats to run your government. If you wish to make a change, stand up and vote. If you wish to speak to an operator in English, press 1…

  5. caspercee says:

    When our government is controlled by Democrats, who will do more to aid other countries and harm America, this is what you get. Obama has re-written our immigration laws to keep illegals in America to take our jobs. He has closed down 9 Border Patrol stations. He is also punishing ICE agents who arrest illegals.

  6. When IRS employees brought this problem to their supervisors, they were told "It's OK' just process them". The supervisors that did this need to be Fired, no pension, no unemployment, no severance pay, just show them to the door!! Maybe they can get a job picking peppers.
    No more libs in charge of our taxes!!!

  7. You mean. On my next tax return if I claim 100 kids ill get 1000 bucks for each of em. Yea! At last count I had 200. Of course ill have to change me name to Jose Gomez so I won’t get audited and thrown in jail for 20 years for defrauding the government. As a irish american citizen born and raised in this great **chuckles** nation who’s grandfathers and those before him labored everday in and day out to build up and out qand across every hill and mountian, the United States of America, and damned liberal gutless baffoonic heartless delusional communist did I mention liberal wants and continues to rip it up and tear it down faster than you can blow a fart. We’ve been had folks and it time to start diggin those bunkers again and this time the bombs really are falling.

  8. This has to be stopped, however the only way to do so is to eliminate the bottomfeeder from our oval office as it has instructed that silly old irs, to ignore blatantly known fraudulent income tax returns…………….HOW THE HELL DOES ONE GET AWAY WITH THAT??

  9. Shamus McQuade says:

    These "aliens" have figured the angle to the system a long time ago. So have the democrats. They use it to perpetuate their voting numbers, the same people who are mooching off of the system . I wonder how many are voting? Because if they are, it will add to the already huge numbers of fraudulent voters, which is another aspect for the democrats angel to stay in power. Now the Hussein Obama has gutted the welfare reform law of 1996 aka TANF, allowing more dependents back on the rolls of welfare handouts that will tax the people like us who work. This one stoke of the pen ensures future dependent voters to maintain the Obama types for a long time. They found an angle in our government and they are exploiting it for their own gain without having earned it

  10. The "government" has done nothing to stop this rape of American taxpayers/citizens….they simply want the illegal alien vote, and, yes, they do vote with the same phony ID they use to get welfare/food stamps/housing assistance/medical and education. We need a CHANGE in the WH!!!! I believe Romney/Ryan will stop this outrageous thievery by illegal aliens and others who are scamming the system. If they don't stop it, then we can vote them out, too!!!! WE HAVE HAD ENOUGH !!!!

  11. Rose-Marie Noa says:

    More proof of the corruption in the odumbo administration!!!

    NOBAMA 2012!!!!

  12. Who needs more proof. There are none so blind as those that will not see.

  13. Where is Congress in all this? Enough is enough!

  14. Chuck Baldwin said it best: When a tree is rotten, it cannot produce good fruit. It needs to be chopped down and another planted in its place. He refers to the U.S. Govt. The old one needs abolished according to our right to abolish it outlined in all our founding documents. We need to install another one in its place, such as will affect our happiness, and according to our will.

  15. timlebsack says:

    There is no point in blaming any group or person for this. We are all guilty. We've got 4.2 billion reasons to eliminate the IRS and repeal the 16th Amendment.

  16. Did the math on the "250 potentially fraudulent returns"–it comes to almost exactly $2,500 per return. Not bad! I sent a check for about that much on April 15 this year. Good to know where my money went. Q: Why did Harry Reid block the attempt to put a stop to this? Was it just a knee-jerk response to a Republican effort, or is he actively aiding and abetting this fraud?

  17. Everyone should turn in their Social Security Number and get an ID number from IRS. Then you can count anyone you want as a dependent – cats, dogs, dead relatives, friends. As long as you list about 15-20 dependents to make it worth your while. When hundreds of returns use the very same address, and Justice Dept won't allow investigation, where do you start?????

  18. He thinks that he can do anything to anyone at any time and the "Conservative" in Congress don't have the balls to to do what needs to be done. Can you say "Impeachment?" Start it now! Keep going and even when he looses don't stop. I don't know if an ex-president can be impeached but if he can then do it!. Not one more penny from the treasury, no secret service, Let him go back to Kenya. Maybe his half-brother can add another mud wall addition. Let's just concentrate on getting him out of the WH.

  19. Bo Johanson says:

    Once again Mr. North fouls his nest. This is just another egregious example of the pot calling the kettle black!!!