By Brandon Moseley
Alabama Political Reporter
U.S. Senator Jeff Sessions (R) from Alabama issued a written statement protesting Senate Majority Leader Harry Reid’s (D) from Nevada blocking of an effort to end a tax loophole that has paid billions of dollars in tax credits to illegal aliens………even for those now living abroad.
Senator Jeff Sessions said, “I’m disappointed that the Majority Leader objected to our effort today to prevent billions in tax credits from being wrongly sent to illegal immigrants claiming they have dependents, many of whom do not live in the US. This should not be a partisan issue: it is wrong for the government to use Americans’ tax dollars to directly subsidize illegality, especially at a time when our nation is spending so much money we don’t have.”
Sen. Jeff Sessions joined Sen. David Vitter (R-LA) on the Senate floor to ask unanimous consent to adopt legislation (S.577) that would close a loophole allowing the IRS to send billions of dollars in tax credits to illegal aliens. This reform measure has already been passed by the Republican controlled U.S. House of Representatives and has been recommended by the Inspector General for Tax Administration. Senator Reid objected to the unanimous consent request.
Sen. Sessions said, “Treasury’s Inspector General for Tax Administration has been abundantly clear that these continuing payments are a misuse of taxpayer dollars and must be stopped. Since the IRS will not stop mailing these checks, he has asked Congress to take action. The House has already done so, but the Senate has not. The President should insist upon action from Majority Leader Reid and deliver firm instructions to the IRS officials who answer to him.”
Sen. Sessions concluded, “Certainly, this nation’s chief executive should be taking appropriate action to end this major abuse. These payments cost over $4 billion a year. That amount alone would meet the remaining funding shortfall for the highway bill, much of the cost of the student loan bill, and is roughly the same amount the President proposes to raise annually by instituting the new Warren Buffett Tax.”
On July 27, 2011 the Treasury Inspector General for Tax Administration released an investigative report detailing widespread abuse of the tax credit system by illegal aliens. According to the report illegal aliens have made $7.3 billion in the six year from 2005 through 2010 from this loophole in the tax code, with $4.3 billion of that coming in 2010 alone. Illegal aliens do not have legitimate social security numbers but the IRS lets them apply for a nine-digit Individual Taxpayer Identification Number (ITIN) to be used to file federal income tax returns. The overwhelming majority of ITIN filers are illegal immigrants. A review of ITIN filers by the Inspector General showed that ITIN filers paid $.87 billion in federal income taxes but received over $4 billion in Child Tax Credit checks. 75% of the ITIN filers did not pay any federal income taxes at all.
The IRS and the Obama Administration have refused to take executive action to end the abuse and now Senator Reid is fighting a congressional plan to end the abuse. The IRS has even allowed illegal aliens to claim dependent who don’t live in this country and have mailed checks to immigrants who are now living outside of the country. The amount of money paid out increased in 2010 because of the passage of the American Recovery and Reinvestment Act of 2009 which changed the calculations on who can qualify for Child Tax Credits and the amounts of credits paid. Low income Americans citizens and legal immigrants have also seen higher tax refund checks from tax credits; but there is nothing in the law now to prevent illegal immigrants from exploiting the system and it is harder for the IRS to prove than an illegal alien does not actually have multiple dependents in his or her home country.
Sen. Sessions called the tax credit scandal “just one more example of financial chaos in the federal government.” Sen. Sessions is a member of the Senate’s Judiciary Committee and the Senate Budget Committee.
