NTF worksheet: illegal127.doc. 3-15.

BACKGROUND. A federal income tax loophole now allows illegal aliens working here illegally to siphon off $1.7 billion every 10 years in earned income tax benefits. Conservative Sen. Chuck Grassley (IA.), chairman of the Senate Judiciary Committee, has introduced a bill ( # not assigned) to stop this draining of taxpayer $$. The Earned Income Tax Credit (EITC) allows poor and moderate income families to reduce their payroll and income tax burdens, keeping more money in their pockets by either lower rates or a tax refund, and to encourage employment of poor citizens and keep them off welfare.

THE PROBLEM. The Obama 2014 executive amnesty permitted about 5 million illegal aliens to obtain Social Security numbers and get tax refunds of up to $24,000, even if they paid no federal tax, worked in the underground economy, and never filed a tax return. His amnesty does not require illegals to pay back taxes owed. The IRS confirmed that illegal aliens who obtain SSNs illegally or as a result of Obama executive decrees can file federal income tax returns for up to 3 years of back taxes and claim the EITC for work done illegally. According to a Congressional Research Report, an illegal during the first year of amnesty could claim over $35,000 in child tax credits and EITC payments. The average EITC rebate in 2012 was $2,300, $6,143 in 2014. This ability to claim back tax credits is a loophole that Congress never intended. Moreover, Obama IRS bureaucrats defend the right of illegal aliens, many of whom never paid federal income taxes, to glean billions in tax refunds. The IRS states that obtaining an SSN triggers the right to request previous tax refunds and refuses to reconsider its 2000 legal ruling. A taxpayer claiming the EITC is not required to have an SSN before the end of the year for which the EITC claimed. The Obama Administration purposely is manipulating the EITC to further advance its leftist immigration agenda. These payments are not really tax refunds but free cash payments to illegals. They can claim the EITC for kids not living in the U.S. or not reside here themselves. It would become difficult for illegals to prove total earnings, because many have accrued “benefits” from a stolen or phony SSN. In addition, illegal families can gain thousands more through the Additional Child Tax Credit program. A family with 3 or more children can claim more than $24,000.

THE SOLUTION. Congress determined in 1996 that the EITC would not apply to illegal aliens working in the U.S. It decided that the means to prevent illegals from claiming the credit would require claimants to provide a valid SSN, not forecasting Obama executive amnesty that automatically granted millions of illegals eligibility for work authorization and an SSN. The Grassley bill specifically prohibits EITC tax benefits for illegals working illegally under the Obama amnesty and future amnesties. It would close the wide IRS loophole. The bill would deny EITC to illegals, unless they could prove eligibility to claim the credit for the year in question and were authorized to work in the U.S. for the entire tax year. The new law would apply to the year in which illegals won deferred status and for all previous tax returns. To assist the IRS to administer this law, the bill establishes information sharing among the Dept. of Homeland Security, the SS Administration, and IRS. Unfortunately, it will take one year for the IRS to update its computer systems to accommodate the change. NE Sen. Ben Sasse supports this bill. He stated that by subsidizing illegal entry, the IRS promotes lawlessness.
HOUSE BILL. Conservative Rep. Patrick McHenry (N.C.) has introduced HR 1249 as a companion bill in the House of Representatives. He states that the EITC is for taxpayers who are trying to pay their bills. McHenry cites that many illegals have used SSNs fraudulently already to gain tax refunds. His No Free Rides Act would prohibit illegal workers from accessing the EITC by forbidding them from using their amnesty SSNs.

TAKE ACTION NOW. We must not reward illegal aliens for breaking our immigration and employment laws. Rewarding them with retroactive tax benefits undermines our immigration system and discourages people who seek to come here from using proper legal channels. This ruse encourages aliens to seek welfare instead of using a legal means to seek work. This largesse will encourage millions more illegals to flock here or overstay their visas. Contact your 2 senators and congressman today to vote YES on the Grassley bill and YES on HR 1249.
Research, documentation, and analysis for this worksheet done by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by other groups in the NE Conservative Coalition Network. 3-15.

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