Follow Up: The IRS And Billions In Tax Refunds To Illegal Immigrants

Several weeks ago, I posted Revealed: Tax Loophole Providing Billions To Illegal Immigrants which contained the initial Bob Segall report as well as his first follow up report. Both noted the billions in tax money flowing to illegal immigrants through a loophole and associated identity theft and document fraud. About a week ago, WTHR’s Segall presented yet another follow-up report from the perspective of IRS employees (IRS workers OK “phony” documents from illegal immigrants). They note the current IRS policy on the matter…it isn’t good:

The IRS continues to ignore the Treasury’s inspector general. Your only recourse is to contact your representative and ask them to support Rep. Burton’s HR1956. As the IRS worker states: “…this needs to be stopped.”

On local note related to child identity theft and illegal immigrants, here is the latest on Jennifer Andrusko in an NPR interview entitled: Identity Theft: ‘Kids Don’t Know They’re Victims’. You’ll recall Andrusko was inexplicably included by Utah Attorney General Mark Shurtleff to announce a credit freeze measure that gives parents a false sense of security.


Revealed: Tax Loophole Providing Billions To Illegal Immigrants

Your hard earned money at work.

A few weeks ago, KSL/Deseret News was busy heralding that thousands of Utah illegal immigrants file tax returns.  Commenters were quick to catch the sophistry.  I italicized the subtle, yet important word.  “File” does not equate pay.  Commenters jumped on that fact that illegal immigrants have a financial incentive to file a return: tax credits.  Fortuitously, Bob Segall with WTHR in Indiana just produced an investigative report entitled “Tax loophole costs billions” as well as a follow-up report:

The Treasury Inspector General (Mr. George) notes that $4.2 Billion per year is being obtained in this manner and the IRS refuses to do anything about it (see here too).  Do note, however, that the ITIN is not exclusively used by illegal immigrants but it appears that the vast majority of the $4.2 Billion in “additional child credit” claims is, indeed, going to illegal immigrants.  Per WTHR:

Other information obtained from the TIGTA audits include:

· Claims for additional child tax credits by ITIN filers have skyrocketed during the past decade, from $161 million in 2001 to $4.2 billion in tax year 2010.

· Undocumented workers filed 3.02 million tax returns in 2010. 72% of those returns (2.18 million) claimed the additional child tax credit.

· In 2010, the IRS owed undocumented workers more in claimed additional child tax credits than it collected from those workers in taxes.

The report blows the KSL/DeseretNews specious article out of the water and exposes exactly why it behooves illegal immigrants to file a return.

For now, contact your Representative and ask them to support Rep. Burton’s HR1956.

h/t to HotAir for catching the WTHR article.

UPDATE: Here’s the text of the WTHR’s follow-up entitled “Will lawmakers act to close tax loophole for illegal immigrants?

As an aside: while looking up some additional information, I also ran upon a real estate blog post regarding the ITIN and mortgages.  I was able to find the Wall Street Journal article “Unlikely Mortgage Winner” which discusses the “Hannie Mae” mortgage securitization process.  I wonder how many of our local banks engage in ITIN mortgages…Zion’s Bank accepts the Matricula Consular and is reputed to be an illegal immigrant friendly bank and Wells Fargo is mentioned i the WSJ article.  If anyone has information on which local lenders engage in ITIN, please pass it along.