House Takes up Bill to Close Tax Loophole for Illegal Aliens



Today, the House is taking up the payroll tax cut bill, H.R. 3630, which contains a provision that would close fix a significant loophole in our nation’s tax laws. The measure is partly a result of a report issued this summer by the Inspector General for the Treasury Department revealing that the federal government doled out roughly $4.2 billion in refundable tax credits to illegal aliens in 2010. (See TIGTA Report 2011-41-061, July 7, 2011; see also FAIR Legislative Update, Sept. 6, 2011)

The payments came in the form of the Additional Child Tax Credit (ACTC), a refundable credit that allows individuals to reduce their federal income tax by up to $1,000 for each child under the age of 17 who meet certain criteria. (FAIR Legislative Update, Sept. 6, 2011) Illegal aliens are eligible for this credit because one is not required to have a valid Social Security Number (SSN) to qualify for it.

In his report, the Treasury Inspector General recommended that the IRS take several corrective measures, including:

  • require individuals filing without SSNs and claiming the ACTC to provide specific verifiable documentation to support that their dependents meet the qualifications for the credit, including residency;
  • verify ACTC claims on returns with questionable wages and withholdings; and
  • alert taxpayers when it becomes aware that their identity has potentially been stolen.

Now Congress has acted to help stop the giveaway of taxpayer dollars to illegal aliens. Section 5201 of H.R. 3630 closes the loophole in current law by barring individuals without a valid SSN from being eligible to receive the credit. This section is based on legislation, H.R. 1956, introduced by the House Social Security Subcommittee Chairman, Sam Johnson (R-TX). (See Ways and Means one-pager) It is also similar to legislation authored by Rep. Jack Kingston (R-GA) and Senator David Vitter (R-LA). (See H.R. 3444 and S. 577)

One way to help stop illegal immigration is preventing illegal aliens from gaming the system. This provision is an important step in that direction.

About Author

avatar

Content written by Federation for American Immigration Reform staff.

5 Comments

  1. avatar

    Everyone holding office in Washington should be fired. This is ridiculous!

    Illegal aliens file tax returns with F.T.I.N. (federal taxpayer I.D. number) on the front, AND attached W2 forms showing STOLEN Social Security numbers on the back. State and federal tax authorities KNOW THESE NUMBERS ARE STOLEN. These returns should be REJECTED and used to track down the illegals for arrest and deportation. The @#$%$# government knows the names, addresses, employers, dependants, the whole nine yards of illegals not only living in the U.S., but illegally employed using stolen I.D.s, but yet they are playing footsie to stop a child tax credit? This shows beyond any doubt that the filth in the federal government are aiding and abetting illegal aliens, and even sending them YOUR TAX DOLLARS in the form of refunds. This is absolutely insane. This country needs a total and complete house cleaning of the garbage in the White House and all the way down to dog catchers. They are worse criminals than the illegal alien plague suffocating America.

  2. avatar

    How long do American citizens have to endure this utter BS, before our useless elected officials that have allowed this criminal behavior are sent packing?

  3. avatar

    The criminal mindset of illegal aliens is immense. Why can’t they use that knowledge to improve the situation in their own countries? Our government is just as much at fault when they aid and abet. What is it? Americans pay taxes and vote to keep the Washington elite bellying up to the public trough, while illegals only take from the system. Yet our leaders seem to prefer them to us.

  4. avatar

    Thank you U.S. Congress for finally waking up and working on this tax refund problem. It is unfair that illegal aliens are given billions of dollars in tax refunds when they should not be working in this country. Millions of American Citizens are out of work, while illegal aliens are allowed to work with stolen I.D. Plus, they should not be rewarded for breaking our laws. No one should be above the Law. Now if we could just install E-verify to finish the job of Representing American Citizens and putting our people back to work in their country.

    • avatar

      If they made E-Verify manditory for all employers and landlords it would be great. In the past few years it has become impossible to find affordable housing. Then they should stop all welfare, food stamps, free school, free medical along with automatic birthright (Anchor babies) and chain immigration. If they did all of this, which is simply enforcing the exsisting laws we wouldn’t have to worry about the deportation of 11 million illegals. They would leave on their own. It doesn’t take a rocket scientist to figure this out but it seems above the heads of congress.