Illegal Aliens Get Billions in Tax Refunds

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A bombshell report by Indianapolis television station WTHR-TV reveals that millions of illegal aliens are getting tax refunds from the Internal Revenue Service (IRS). The scam is an infuriating combination of Orwellian law-making, tax-preparer complicity, IRS impotency, and Congressional gridlock, all of which result in billions of dollars of fraudulent payments being made to individuals claiming to support alleged family members in Mexico.

First, the law. In 1996, the U.S. Treasury introduced the Individual Tax Identification Number (ITIN), a nine-digit tax-processing number assigned by the IRS to individuals who are obligated to file a federal tax return, but lack or are ineligible for a Social Security Number (SSN), typically required to file taxes. Since tax law requires everyone who earns money in the United States to pay taxes–even those who are working here illegally–the ITIN was created to facilitate filing for illegals who can’t get an SSN. No doubt such a law was seen as pragmatic. If an illegal alien was willing to file a tax return, better to have a way for the individual to do it, than lose the revenue. In addition, an ITIN allows U.S. employers to meet withholding requirements.

Yet such a law is the epitome of political expediency. It is essentially an admission that law enforcement officials are powerless to stop illegals from entering the county and obtaining a job–and just as powerless when it comes to cracking down on the companies that hire them. Yet that is hardly the end of the expediency. While requirements for obtaining an ITIN ostensibly include submitting original, official documentation from one’s country of origin to the Austin, Texas, IRS processing center for validation, the IRS is allowing field offices to process the documents. The rationale? Applicants prefer having their documents returned after a brief interview, rather than risk losing them in the mail if they were forced to send them to Austin.

Yet Austin is where the IRS maintains a fraud unit whose document checking is reportedly rigorous. The genesis of the current scam is the fact that document checking becomes far less rigorous when the worker also decides to obtain ITINs for his children, nieces and nephews.

Why is this critical? Enter the Additional Child Tax Credit (ACTC) which is “a refundable credit that can be claimed by taxpayers who are ineligible to claim the full non-refundable child tax credit, because it exceeds their total tax liability. The additional child tax credit was created to reimburse taxpayers for the non-refundable portion of their child tax credit.” In other words, the more legal dependents one can claim, the greater the refund one will receive from the IRS. Legal dependent is defined as a child who has been present in the filer’s household for over half the year.

Enter the scam. “We’ve seen sometimes 10 or 12 dependents, most times nieces and nephews, on these tax forms,” the tax preparer-turned-whistleblower told WTHR News. He then showed the WTHR reporter some examples. “Here’s a return right here: we’ve got a $10,300 refund for nine nieces and nephews,” he said. “We’re getting an $11,000 refund on this tax return. There’s seven nieces and nephews,” he added, pointing to another set of documents. “I can bring out stacks and stacks. It’s just so easy it’s ridiculous.”

The reporter then visited an illegal alien who took part in the scam. He admitted his home was being used by four other “undocumented workers” who don’t live there. Combined they claimed 20 dependent children were living inside one trailer home in Indiana. Their combined tax refund? $29,608. The man also admitted that the 20 children were living in Mexico and had never lived in the house. The rationale behind he and the other men taking the ill-gotten gains? “If the opportunity is there and they can give it to them, why not take advantage of it,” he contended.

Unfortunately, he has a point. The same whistleblower reported dozens of cases of fraud to the IRS. “These were fraudulent, 100 percent fraudulent tax returns, but I got no response; absolutely none. We never heard a thing,” he said. “To me, it’s clear the IRS is letting this happen.” A Northern California IRS field-office worker who viewed the report echoed that sentiment. “The fraud has been going on for years,” he told WND. “Business as usual.”

The worker also explained the tax-preparer element of the deception, contending that Spanish language tax-preparers who educate their clients about how much more money they can get back if they increase the number of dependents on their tax forms are “the enablers and catalyst of this fraud.” They get their clients a greater return, which builds good will and repeat business, while taxpayers get soaked. Equally disturbing, word of mouth virtually guarantees even greater abuse next year. Abuse in which WTHR News’ purported whistleblower continues engage himself, and likely explains why he refused to allow himself to be identified on camera. Perhaps whistleblower/fraud facilitator would be a far more accurate description.

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  • Ken

    And this is supposed to surprise anyone?!?

  • jacob

    Here is an issue worth taking up by the TEA PARTY people….in spite of the fact that the people it sent to
    Congress didn't do so far, anything…..

    It is known as "Civil Disobedience" …

    How about a nationwide campaign letting Congress know that it either corrects these abnormalities within
    30 days or people will stop paying taxes and let OBAMA and the DEMOCRAPS of Congress foot the bills out
    of their own pockets…. and lets watch OBAMA trying to make a political campaign issue of this matter

    Rest assured we would see action quicker than…..

  • oldtimer

    And who was the president in 1996 who allow this bill go be approved?

    • Questions

      Bill Clinton. The very president who knuckled under to the Religious Right knuckleheads who pushed for, and got, the Additional Child Tax Credit in the first place. Being "pro-family" has its drawbacks, immigrant hustlers among them.

      • Buck O'Fama

        the law of unintended circumstances…bites us in the ol' buttocks every time.

        we elect people whom we are led to believe might be smarter than the rest of us, and it's disappointing–alarming even– when they turn out to be dumber than the kid at the Jiffy Oil. Or as crooked as the Rutherford Co TN mayor who snuck in a mosque builidng permit in the dark of night…and is now ( oddly ) driving a much nicer car…

  • Schlomotion

    This article is a weak but verbose attempt to redirect the tax ire against Eduardo Saverin against illegal Mexican aliens instead. It's hilarious that Mr. Ahlert credits World Net Daily with discovering this "tax scam" against other latinos. World Net has "discovered" other things like: 9/11 was "caused" by American depravity and the gay lifestyle, that Barack Obama "was not born in the United States," that Al Gore had "dope dealers" in his campaign, and that Ann Coulter "endorses" gay organizations. In short, WND is Joseph Farah, and Joseph Farah is a kook who had to settle out of court for libel in 2008.

    • Western Canadian

      And you are a kook who lacks a platform for his own opinions. Settling out of court for lible, is not proof of lible. Even a moron like you should know that.

      • Schlomotion

        Actually, it's proof that he would have lost in court and paid the same amount if not more money, or at least he thought so.

        • Western Canadian

          No, it is not proof of any such thing. Unless he was absolutely certain that the judge would award him all costs, and that his accuser would be able as well as willing to pay, throwing in the towel on a frivolous case could be a very sad but wiser course of action. The AWD act is an ongoing source of examples of this type of legal crime being commited by cons and their slime-ball lawyers.

          • Schlomotion

            Your thinly veiled antisemitism is showing.

      • Western Canadian

        Sorry, ‘libel’.

    • Crossbow87

      It is weak, why? Because Joseph Farah settled out of court? I'm not following your logic. Either the tax law is being fraudulently exploited or it's not.

      • Schlomotion

        The tax law is probably being exploited. However, the tax law is really a red herring, as the original intent of the article is to point out that the "real" tax fraud is Mexicans as compared to Eduardo Saverin's tax immunity from the article "Facebook Founder Goes Galt" http://frontpagemag.com/2012/05/18/facebook-found

        The articles published here are meant to heavily cross-reference and heavily cross-promote one another. The site goes down on Friday night and resumes publication and posting on Monday morning, so Monday's articles are a continuation of the themes of Friday's articles. This article picks up where the Daniel Flynn article left off. This article is citing World Net Daily which has a libel problem. They don't really care about tax fraud. If it was Republican Christian Fundamentalist Oil tax fraud, it would not even be reported.

        • Crossbow87

          Your argument is what again? Saverin renounced his citizenship to avoid taxes and illegals are scamming US taxpayers for over $4.2 billion. You are trying to cultivate the idea that Saverin is a tax fraud as well? And apparently you have a problem with FPM's publishing cycle. Well, as someone who thinks correctly, I don't find a contradiction between this piece and the piece about Saverin. Both are true and not logically dependent upon one another. In addition, to say that FPM would not report on Christian fundamentalist tax fraud is not so much to indict FPM but it begs the question of where does that happen? If you know of an incident where a Christian organization is defrauding our government, please share with the class. Otherwise, you're not really criticizing FPM, you're simply trying to smear them. Understand the difference?

  • Ain't No Dhimmi

    Almost time to open up our borders to 'Mexico and Canada and bring in the new currency,

    The Amerco.

  • Diane Rossi

    This is outrageous! We need to post a link to this article on facebook!

  • marios

    who can expect honest trial under Eric Holder Justice department? Till BHO and his accomplieces in the power, in the WH America is upside down. Stop illegal immigration, stop Muslim immigration at all and … Romney is the next President. Only in this circumstances our beloved country can be survived.

  • Diane Rossi

    My brother-in-law can't even get affordable health insurance, yet we're giving our hard earned tax money to illegals who shouldn't even be in this country! I'm fed up!

    • Daphne jordan

      it's not right illegal immigrants are riding on the backs of americans who know what hard work means. the crazy thing is is that even if/when illegal immmigrants do pay taxes they get tax rebates and end up getting more money back than what they payed. Also illegal immigrants are granted acess to our public services without even paying taxes. The worst thing is though is that I am only 14 years old and i have dual citizenship to both france and america and im not an illegal immigrant and i amy not be the brightest and yet i know what it means to work and not take money from people who deserve it. These illegal immigrants are bascially theves they are stealing our hard earned money!!

  • Nessus

    I'm afraid it's too late……..they is simply no political will to do what the law requires: enforcement of the border and deportation for those found to be here illegally. There is no will.

    Never ending legal & illegal immigration are the reasons why the threshold was breached last week, that being white babies are no loner the majority of babies born in our country. It can change back but all immigration needs to be reduced greatly.

  • Schlomotion

    I admit it, jew haters smell bad.

  • Ghostwriter

    And it isn't just native-born Americans who are angry about this. Legal immigrants should also be outraged by this. Our tax money is going to people who shouldn't be here in the first place. As for Schlomotion's pathetic attempt to change the subject with Eduardo Severin,that's not the POINT!!! Our tax money is going to illegal aliens. Eduardo Severin has NOTHING to do with this topic.

  • wctaqiyya

    Would it be wrong for me to think renouncing US citizenship might be a good move? What the heck, citizens have fewer rights than the terrorists in Guantanamo who get free food, clothing, housing, full medical, dental, eye care and legal. I will not be shocked to learn they have government pensions. Illegal immigrants get jobs, legal aid, can file lawsuits, work, buy houses, drive and come and go as they please. Owe money citizen? Wanna send money overseas? Wish to travel? Get stuffed, pay a fine, get molested by the TSA, get raped by the IRS and hope the postman hasn't lost your $350 social security check. Citizenship? No thank you, I'll have what that other fellow's having instead.

  • Amused

    The POLITICIANS have known about this for several years , the child tax credit is for Americans .But because we have a bunch of spoiled whining brats as politicians whose only concern is to continue their great pissing contest , they will do it at the detriment of their own country , and if the teabaggers expended th same amount of energy fighting anything "Obama " and address these abuses , it would be brought to a quick end . But alas bi-partisanism " is a dirty word for the right . And all the politicians are afraid to alienate ANY voting base to correct serious problems and abuses. THERE IS AN EASY SOLUTION HERE , if both parties chose to BEHAVE LIKE AMERICANS >

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  • http://cutthemalarkey.com Vic Kelley

    “To me, it’s clear the IRS is letting this happen.”

    OK, it seems like that. But let's put the blame on the other party too – the Mexican illegals. It takes a lot of contempt for a country to break so many of its laws and steal its money like that.

  • Mario

    Oh please,

    There is people out there who will break the rules, if they get a whiff it can be done. First of all, don't label "Immigrants" as a derogatory term, don't label all Latino/Mexicans as illegal Immigrants because obviously we're not the only immigrants and many of us are here legally. I agree this isn't right, but this takes two sides for it to even BE a problem. The change needs to come from up top. It is the politician's/law makers/IRS's fault, a little more than it is illegal immigrants fault.

    Now listen, I hear many of you talk as if my Mexican people don't work hard for their money, and let me tell you they may work way harder than you. They do the extreme manual labor, stuff that you wouldn't even think of doing for a few months. They can't go after their dreams and achieve them, they need to work to support their family because they live paycheck to paycheck. It takes harder work to make it up top. You people's hate disgusts me in such a way, I can't begin to describe. But I forgive you for your undeveloped incompetent brain.

    "OK, it seems like that. But let's put the blame on the other party too – the Mexican illegals. It takes a lot of contempt for a country to break so many of its laws and steal its money like that. "

    Remember, I can bet anything your ancestors were immigrants at some point.
    I'm not here to bash on you guys, I'm here to shed some light on the other side of the situation.

  • http://www.rahmanravelli.co.uk/ Aaron Whitney

    Why is there such a tax law in the first place? I thought they were cracking down on illegals? This law and those actions basically amount to them condoning the presence of illegal aliens and even providing them benefits.

  • Rick Cooley

    God damn!!!! I don’t understand how this government loves the mexicans so much. Did they sell their souls to satan to achieve such a high level of loftiness? I mean c’mon, the mexicans are getting $10,000 for fraudulent tax refunds, and getting by, but an American citizen will get years in prison for doing the same thing. I hate the mexican people and i hate the U.S. government for allowing such unjust behavior to go on. The mexicans love it here in the U.S. because they get everything handed to them on a silver platter. No wonder they are so cocky, so arrogant, so egotistical, and so full of pride. They think they run this country, and with the way things are looking, they will someday own this country, and we’ll have a mexican-born president in the White House.