Friday, September 9, 2011

Illegal Workers Used Tax Credit to Pocket $4.2 Billion

The number of Government employees has risen by the hundreds of thousands, and they still can't get anything right. We have an illegal immigration problem, and not only can we not enforce our laws, but we incentivise it. The government has gotten so big that it cannot supervise its workers. Congress passes bills that they have no clue what is in them. The bills are so full of legalese that even the lawyers don't understand them, and they don't care. Each law gives them additional lifetime job security. It is time for bills written in common language so that everyone with half a brain can understand them

This tax situation would be unbelievable if you didn't account for the multitude of liberals in Government.

Talk about a tax loophole.

Undocumented workers collected $4.2 billion in a certain tax credit last year, up from less than $1 billion five years ago, according to a new audit.

The report from the Treasury Inspector General for Tax Administration looked only at a tax benefit known as the Additional Child Tax Credit, a refundable credit meant for working families. The audit found that as a result of vague U.S. law -- as well as an expansion of the tax credit in stimulus legislation and other measures -- the number of illegal workers collecting the money has skyrocketed.

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The inspector general's office expressed concern about the trend and urged the IRS and Treasury Department to determine once and for all whether that money should be paid out.

"The payment of federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside and work in the United States without authorization, which contradicts federal law and policy to remove such incentives," the report said.

The report highlighted a quirk in U.S. law. Even people who are not authorized to work are supposed to pay the IRS taxes on their income. Many of those people cannot obtain a Social Security number, so to facilitate this the IRS hands out what are known as Individual Taxpayer Identification Numbers -- so illegal workers can file returns. However, in doing so many of those workers are claiming tax benefits like the Additional Child Tax Credit. For some, it's a way of making even more money.

"Refundable credits can result in refunds even if no income tax is withheld or paid," the report noted.

The Additional Child Tax Credit is an offshoot of another tax credit worth up to $1,000 per child. Restrictions for the tax credits were loosened in 2001, and eligibility was temporarily increased by the 2009 stimulus bill.

"As such, more taxpayers could claim the ACTC or claim a greater amount," the report said. The inspector general's office said 2.3 million undocumented filers claimed the credit in 2010, adding up to $4.2 billion worth of refunds.

Read full FOX News report here.

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