Whatever one thinks of the President Obama?s aggressive executive action on immigration?which is still being litigated in the courts?tax refunds for the effected illegal immigrants has itself become controversial. The IRS says that illegals can file and claim refunds for the last three years under the Earned Income Tax Credit. That is the same refundable tax credit that is responsible for billions in fraudulent refunds. IRS Commissioner Koskinen confirmed this, explaining the seemingly bizarre result to Sen. Charles Grassley (R-Iowa).
What if you never had any income or never filed a return? Under President Obama?s executive action, an illegal immigrant can (1) get a Social Security number, (2) claim the Earned Income Tax Credit for the three open tax years, and (3) IRS sends three years of tax refunds. No matter that you never paid taxes, never filed a return, worked off the books, etc.
The IRS says this is the way the Earned Income Tax Credit works. IRS Chief Koskinen says the IRS is following a 15-year-old opinion that ?a taxpayer may claim the Earned Income Tax Credit for a taxable year using a social security number (SSN) acquired in a later taxable year.? Calling the three year tax refund perk a mockery of the law, Senator Grassley noted that illegals would be able to claim billions of dollars in tax benefits.
Sen. Grassley vowed legislation to overturn the IRS position. ? The tax code shouldn?t reward those who broke our immigration laws,? he said. So far, the President hasn?t backed down, so U.S. Rep. Patrick McHenry has introduced a bill to keep undocumented workers from receiving the Earned Income Tax Credit, a benefit for low- to moderate-income taxpayers.
Tax Refunds To Illegals Under Obama Immigration Action Would Be Stopped By Bill - Forbes