While Occupy Oakland focuses on Wall Street bailouts and student loans, they should do a little homework on ripoffs by illegal aliens in Oakland and across the US. The US Treasury Department revealed shocking abuse of federal child tax credits meant to assist low-income US citizens and their families. Instead, illegal aliens are among those who — filing tax returns under an ‘individual tax identification number’ because they do not have a social security number — have latched on to this pot of gold while our economy falters. The ‘ITIN’ is the illegal worker’s ticket to free government handouts and they are milking it. Is it any wonder that there’s no money left for student loan forgiveness, mortgage relief, or extended unemployment benefits?
Secondly, between one-quarter to one-third of all ‘Earned Income Tax Credit’ claims are“improperly paid” according to the US General Accounting Office. While immigrants account for only 13 percent of the U.S. population, they received an estimated 26 percent of all EITC benefits in 2008, according to a noted economist. The EITC benefits they received totaled almost $4 billion.
A federal audit in July, 2011 reported ITIN filers are much more likely to claim the Additional Child Tax Credit ‘ACTC’ than other taxpayers. In 2010, 72 percent of all ITIN filers claimed the ACTC, while only 14 percent of non-ITIN filers claimed the ACTC. There’s no obligation to pay any tax in order to collect on this ACTC. In a prior report, the Treasury Dept. noted that billions of dollars in child tax credits also are being provided to ITIN filers without verification of eligibility. Since it’s against the law to provide tax incentives to non-citizens, the government audit has teeth. An audit of the IRS reveals over $4 billion in refund credits went to undocumented workers in 2010.
Here’s an excerpt from the Inspector General’s report.
Despite a federal law prohibiting tax incentives to non-citizens, the US government has been doing exactly that since 2001.
In 2005, 796,000 ITIN filers claimed ACTCs totaling $924 million. By 2008, these claims had risen to 1,526,276 ITIN filers claiming ACTCs totaling $2.1 billion. The American Recovery and Reinvestment Act of 2009 (Recovery Act) temporarily increased eligibility by changing the income threshold for calculating the ACTC for Tax Years 2009 and 2010. Prior to the Recovery Act, the ACTC would have been limited to 15 percent of earned income more than $12,550. The Recovery Act changed this threshold to 15 percent of earned income more than $3,000. As such, more taxpayers could claim the ACTC or claim a greater amount. In 2010, 2.3 million ITIN filers claimed ACTCs totaling $4.2 billion.
The report came out in July and it remains to be seen how quickly the government will move to close this loophole. Recouping the money from criminal tax fraud perpetrators who can’t even be found by the INS or ICE won’t be easy.