I am sorry to report that the IRS practice described in this recent FORBES headline is not new. It’s an old story that continues to shock most — but not all — Americans:
“IRS admits it encourages illegals to steal Social Security numbers”
Imagine my surprise when I found a pile of IRS 1040 tax returns among the tons of trash at a “lay-up site” used by illegal border jumpers near the Mexican border west of Douglas, Arizona. There are dozens of such places where the thousands of border invaders change clothes, discard trash and wait to be taken by their “coyote” to their pick-up location for moving on to Phoenix or El Paso or Houston.
The IRS 1040 forms were filled out and had been used. Hey, who says illegal aliens don’t pay taxes?
I collected the 1040 forms and we noticed all had claimed Earned Income Tax Credits and all also had claimed around nine deductions for children. The average refund was around $4,000. It occurred to me only much later that the American taxpayer may be funding the coyote’s $1,500 fees for smuggling poor Mexicans, Salvadorans — and Iraqis and Vietnamese — across our southwest border.
When I sent the 1040 forms to the Social Security Administration and the IRS, I was told that the practice described in the FORBES article was the one being followed in dealing with these returns. I tried to amend the appropriations bills for the IRS to be the practice, but I got nowhere. My Republican colleagues didn’t want to hear about it and were ticked at me for bringing it up.
Illegal aliens use “the system” to report income and also gain every possible “refund” the tax law — and IRS collusion — allows. Who can blame them when the welcome sign is in bright green neon letters?
This FORBES headline should not shock anyone. The IRS collusion with illegal alien tax fraud is not a secret. Over the past decade, there have been regular news stories exposing tax fraud by illegal aliens– and IRS indifference to the scandal.
The shocking thing is that the FORBES headline is not an exaggeration. The IRS knows illegal aliens are using stolen Social Security numbers and is glad they are doing it. But that is only the tip of the iceberg called illegal alien tax fraud.
IRS Commissioner John Koskinen made the revelation in congressional testimony this past week, but no one was really shocked. The IRS wants illegal aliens working illegally to file tax returns and pay taxes on their illegal earnings like everyone else. So, the government figures it is a smart thing to make it easy for them to do so. The government doesn’t care whether the Social Security number used is stolen or not, it’s the tax filing itself that is important to the IRS.
- When asked why the agency has a policy to ignore notifications from the Social Security Administration that a number does not match the name used on the tax filing, the agency replies, literally, “That’s not our job.”
- The IRS deliberately and unapologetically avoids telling you when your SSN is being used unlawfully by another person — or ten or twenty other people.
- Efforts in Congress to fix that problem are criticized as “racist.”
But as I said, that IRS scandal is only the beginning of the story of tax fraud by millions of illegal aliens. Millions of illegal workers are filing tax forms not to pay their taxes but to claim and then receive refundable tax credits– that is, cash refunds– and those cash payments run into the billions annually.
It’s politically correct in Washington, DC, to say that illegal aliens are willing, even anxious, to “pay their fair share of taxes.” It’s part of the mythology of the noble “undocumented worker” seeking the American dream. Even the Republican National Committee believes it.
This week the RNC sent a fundraising letter to a few million prospective donors using the tired gimmick of a “poll” on critical issues. One question asked voters if they support legalization for illegal aliens if they meet a number of tests, one of them being “paying back taxes.” We all know illegal aliens are anxious to do that to prove they have earned the right to stay here and contribute to the economy.
The problem is they already have a way to pay back taxes if they want to do it, but millions are doing just the opposite. Millions of illegal aliens are collecting refundable tax credits– that is, cash — by filing fraudulent claims. And the IRS doesn’t care.
An April 2012 investigative report by an Indiana television station found numerous cases of tax fraud in the Child Tax Credit and Additional Child Tax Credits programs.
- Four illegal alien tax filers had used the same address and claimed a total of 20 children for refundable tax credits of up to $1,000 for each child. Only one child actually lived at the address, and the other 19 lived in Mexico and had never even visited the United States.
- That aspect of the fraud is in fact not really illegal: the child you claim on the tax form does not have to live in the United States. the child can be living with Aunt Rosa in Peru or Grandpa Felix in Algeria.
- The IRS response to the fraudulent payments? They refused to comment or to confirm any investigation and refused to meet with reporters to answer questions.
IRS refusal to act on documented fraud by illegal aliens is legendary. For a decade the agency’s own Inspector General has complained of inaction by agency managers.
- According to reports of the Treasury Inspector General for Tax Administration (TIGTA), millions of illegal aliens are filing tax forms in order to claim refundable tax credits and receive billions in tax dollars — even if they have never paid one dollar in federal income taxes.
- Illegal aliens are accessing not only the Earned Income Tax Credit (EITC) but the Child Tax Credit (CTC) and Additional Child Tax Credit ACTC) to the tune of billions annually.
- And according to testimony of the Treasury Department’s Inspector General, the IRS has refused to take steps to curtail illegal aliens cashing in on these programs.
You may be thinking that the government surely would take action if the tax fraud is costing the Treasury millions of dollars. It’s fraud on a small scale, right? Nope. It’s costing billions, not millions.
While I was in Congress back in 2007, I tried to blow the whistle on this IRS partnership with schemes costing taxpayers billions.
- A brave IRS employee in one of the agency’s Western regional offices called my office and met with my staff clandestinely at a restaurant in the capital of one of our southwestern states. He offered concrete, credible information and internal reports that showed there was a huge problem– and that it was being ignored by agency management.
- His regional office team had studied a random sample of Child Tax Credit claims by tax filers using “ITIN” numbers– tax ID numbers given lawfully to persons who do not qualify for Social Security numbers but are employed and need to file tax returns.
- Their sample revealed a high rate of fraud which suggested widespread fraud involving hundreds of millions of dollars. But he and his regional colleagues could get no action from headquarters to investigate it further.
Can you guess who blocked any congressional action to demand the IRS investigate illegal alien abuse of these “refundable tax credit” programs? The Congressional Hispanic Caucus threatened massive protests against “discriminatory practices” if the IRS pursued the issue.
At that time, Democrats were in the majority in the House and the Senate and thus controlled the committees, so no investigation was ever conducted. But did Republicans undertake to clean up the mess when they gained the majority in the 2010 election? No.
There is no evidence the problem of tax fraud by illegal aliens is something the IRS cares about.
- A December 2014 report by Watchdog.org revealed that an IRS audit documented a 24 percent error rate in claims made under the EITC — a loss of $14.2 billion in unlawful tax refunds in the year 2012.
- A similar audit of the Additional Child Tax Credit program in 2012 revealed erroneous payments in the range of 25 percent to 31 percent.
- But did the audits result in corrective actions? No.
Adding all of the fraud rates together from three separate refundable tax credit programs suggests total tax fraud in the realm of several billion dollars. Of course, not all of the fraud is by illegal aliens. But the lack of IRS interest in curtailing illegal alien abuse of these tax credit programs tells us the problem will only get worse in the years ahead.
Let’s add the shameful, willful taxpayer-funded philanthropy toward illegal workers to the many reasons why IRS Commissioner Koskinen should be impeached and a new management team put into the agency to conduct a thorough house cleaning.
What are the odds of that happening under President Hillary Clinton? Or President John Kasich?