Should illegal aliens be able to collect the Earned Income Credit?
Should e-verify or a similar program be used when filing taxes?
Why should illegal aliens benefit when most of these filing taxes are doing it with stolen or fraudulent Social Security numbers?
Should tax preparers who know they are filing for an illegal immigrant report them to the IRS, ICE and Social Security?
If they don't, is this aiding and abetting a felony?
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Illegal immigrants cashing in on federal tax credits, study shows.
By: Kevin Mooney
Examiner Staff Writer/Commentary
April 16, 2009 Large numbers of illegal immigrants file tax returns using phony Social Security numbers to cash in on the federal Earned Income Tax Credit, thanks to lax government management, according to the author of a new study.
“Technically, only people authorized to work in the U.S. are eligible for the credit, you need a valid Social security number,” said Ed Rubenstein, a financial analyst and economist, speaking at a news conference Tuesday at the National Press Club.
“But identity theft, stolen Social Security numbers, and other scams effectively nullify the restriction. As a result, illegal aliens actually receive the EITC at even greater rates than legal immigrants,” Rubenstein said.
The IRS makes little or no effort to verify the authenticity of Social Security numbers, or existence of dependant children, Rubenstein said.
This makes it possible for illegal immigrants to claim children still living in Mexico as dependents and for parents living illegally in the U.S. to file separate returns claiming the same children as dependents under the EITC, Rubenstein said.
The EITC was created to boost work incentives for poor families with children. Childless households received a maximum $438 payment in 2008, while the maximum available to families with two or more children was $4,824.
“From a distance, the EITC looks like a winner,” he said. “The devil is in the details. For starters, the program is dominated by fraud.”
Illegal immigrant households are more than three times as likely to receive EITC than native-born American households,
Rubenstein said. Higher fertility rates evident among the immigrant population accounts for this disparity, he said.
“Even a tiny increase in the fertility rates, if maintained over the decades, will have enormous consequences,” Rubenstein said. “The role of EITC in the nation’s demographic destiny cannot be denied.”
Rubenstein also cited figures from the General Accounting Office (GAO) showing that as many as a third of all EITC claims are “improperly paid.”
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/Many-illegal-immigrants--43088487.html#ixzz0cvkZC6Jr
Edit:
In those rare cases when an audit is called for where it is found that the Social Security number/s does not belong to the tax payer claiming Earned Income Credit, the IRS informs the tax payer that he is not eligible for the Earned Income Credit without any punitive action. In a case where the IRS discovers that a tax payer was paid the Earned Income Credit in previous year/s and was not qualified to do so, the tax payer must return the money to the IRS.
Many illegal aliens, especially those who share residences with others, move several times a year from one address to another or even move to another state. So when a discrepancy is discovered by the IRS, the illegal alien tax payer who has already received his Earned Income Credit or other refund which must be returned is nowhere to be found. The alien can in future tax filings use another name and another Social Security number.
Given that there is virtually no risk of being discovered for false Earned Income Credit claims, there are probably a significant number of illegal alien tax payers receiving Earned Income Credit who are not entitled to do so.