IRS Program Roundly Criticized; Paid $4B to Illegal Immigrants Claiming Tax Credits
Byline: Jerry Seper, THE WASHINGTON TIMES
The IRS' payment of more than $4 billion in 2010 to illegal immigrants under a program allowing workers not legally in the U.S. to claim tax credits for dependent children has been criticized roundly by the Treasury Department's Office of the Inspector General, which noted Thursday that while some corrective actions have since been taken, additional improvements still are needed.
In the newest report, J. Russell George, the Treasury Department's inspector general for tax administration, said that despite prior reports and congressional testimony urging changes, IRS management has not developed organizational processes and procedures to address potential fraud schemes, and that no action had been taken to analyze information from previously processed applications to identify those that might be questionable.
Mr. George also said his tax examiners were concerned that IRS management will reverse the revenue service's new focus of ensuring that only qualified people receive the tax credits.
The tax credits center around a document created by the IRS and known as the Individual Taxpayer Identification Number, or ITIN, which is issued to people not eligible for a U.S. Social Security card because of their illegal immigration status, but are required to file tax returns because they earned money in the United States.
In reports and congressional testimony dating back to 2009, the inspector general's office has warned the IRS that action was needed to ensure the proper use of the ITINs and to verify or limit refundable credit claims.
The reports and testimony noted that claims for additional child tax credits by those holding ITIN cards had increased significantly, jumping from $924 million in 2005 to $4.2 billion in 2011.
I am pleased that the IRS has made significant progress addressing seven of the nine deficiencies that [the inspector general for tax administration] previously identified in the ITIN application program, Mr. George said. Now, IRS officials need to address the remainder of our concerns.
Many people who are not authorized to work in the United States and, as a result, unable to obtain a Social Security card are given ITIN cards to facilitate their filing of tax returns for the wages they have been paid. Although the law prohibits aliens residing without authorization in this country from receiving most federal public benefits, an increasing number file tax returns claiming the additional child tax credit, a refundable tax credit intended for working families. …