Undocumented Workers Paid $4.2 Billion in Refundable Credits

The TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION RECOVERY ACT has just released a shocking report that revels that with our debt standing at over $14.5 trillion and counting, The Internal Revenue Service allowed undocumented workers to collect $4.2 billion in refundable tax credits last year, a new audit says, almost quadruple the sum five years ago.

Many individuals who are not authorized to work in the United States, and thus not eligible to obtain a Social Security Number (SSN) for employment, earn income in the United States. The Internal Revenue Service (IRS) provides such individuals with an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns. Although the law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, an increasing number of these individuals are filing tax returns claiming the Additional Child Tax Credit (ACTC), a refundable tax credit intended for working families.

The payment of Federal funds through this tax benefit provides an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.

See also : American Recovery and Reinvestment Act of 2009 Made Fraud Easier

Sen. Orrin Hatch (R-Utah), ranking member of the Senate Finance Committee, On Friday announced plans to examine the refunds.

“The disconcerting findings in this report demand immediate attention and action from Congress and the Obama Administration,” Hatch said in a statement.. “With our debt standing at over $14.5 trillion and counting, it’s outrageous that the IRS is handing out refundable tax credits...to those who aren’t even eligible to work in this country.”

Wage earners who do not have Social Security numbers and are not authorized to work in the United States can use what the IRS calls individual taxpayer identification numbers. Often these result in fraudulent claims on tax returns, auditors found.

Their data showed that 72 percent of returns filed with taxpayer identification numbers claimed the child tax credit.

Changes to tax law are partly to blame for the explosion in refunds for additional child tax credits in recent years, auditors found. Before 2001, filers needed to have three or more children to qualify — and to owe more Social Security taxes than earned income credits.

But those requirements have been eliminated and the allowable refund for each child doubled. The American Recovery and Reinvestment Act of 2009 also made the refund easier to get, auditors found.

The IRS said it lacks the authority to disallow the claims.

Government and fraud go hand in hand. The American Recovery and Reinvestment Act of 2009 should be done away with. And when politicians like Obama refuse to address rampant government spending and acknowledge the waste and fraud that goes on in this and most other systems within the government they are failing us, and the country.

Changes to tax law are partly to blame for the explosion in refunds for additional child tax credits in recent years, auditors found. Before 2001, filers needed to have three or more children to qualify — and to owe more Social Security taxes than earned income credits.

But those requirements have been eliminated and the allowable refund for each child doubled. The American Recovery and Reinvestment Act of 2009 made the refund easier to get.

How will Obama pay for his welfare state ?

Obama's first term was all about putting the building blocks in place for his European style welfare state. That's why the Health Care Bill was important enough to be pushed through using political trickery, "cloture". Let's not forget the democrats controlled all three branches of government and could not legally pass that monstrosity. But it is key to building the welfare state, and had to be put in place. Entitlements once on the books can almost never be taken back. Even if sometime after the 2012 elections Republicans manage to get control of all three branches of government, it's not clear they would ever be able to kill the Health Care bill.

Cap and Trade is still on the agenda

Cap and Trade would have been a major source of funding for the Obama's Franco-German welfare state, along with the VAT tax. Cap and Trade is dead for now, but the media will continue tp push the Global warming fear mongering campaign, and the government will continue to spread it's propaganda, if the right crisis or opportunity arises, they will be ready to try and capitalize on it and pass Cap and Trade.

The European welfare state requires huge levels of public spending and taxation. Public spending in France, Italy and Sweden is more than 50% of GDP. Germany provides the lower boundary at a "modest" 48%. Some of this public spending goes to the unfortunate, but the bulk goes to the middle class for retirement and health benefits.


If Obama wins re-election the Vat Tax may be the next.

The VAT tax almost certainly will be among the first issues that will Obama will push if he is re-elected. The VAT tax has now become even more important since Cap and Trade has died. Obama is desperate and need funds, he is looking at every option. Another avenue is energy, and gas taxes. Obama and the Dept of Energy are looking at imposing punitive taxes on gas as well as other types of fossil fuel energy sources, all in the name of pushing "green energy" and will claim those taxes will to that cause, but will slowly disappear into the general fund and make their way into the welfare and entitlement programs.

Obama sees defense spending as a cash cow waiting to be slaughtered, and the money used to fund his welfare programs.

And lastly the Health Care bill itself will provide a source of funding, with the government taking on food and health by taxing and regulating so-called "un-healthy" foods, that it will claim adds to our health care costs.


It's only going to get worse.

If Obama wins re-election don't look for the class-warfare to end, it will only increase. Obama needs to implement the last pillars of his Welfare state. The pillars of the European welfare state are state retirement (often at relatively young ages), universal state health care,and entitlements for poverty and unemployment that are virtually unrestricted by calendar limits. And massive amounts of funds must be found to pay for it.


Please also consider :

Obama Has Nearly Achieved His European Welfare State

Many view the Obama presidency as a failure, but not if you are a progressive liberal, Marxist, or Socialist. Obama has massively increased the welfare state, and he knows full well that once it is implemented, it just keeps growing, and is almost impossible to stop.

George Orwell only got two things wrong, the method and the decade.

The Road to Hell is Paved With Welfare

The net worth of whites is now 20 times higher than for blacks and 18 times higher than for Hispanics, both records. For white households, the median net worth (assets minus liabilities) in 2009 was $113,149. That compares to $6,325 for Hispanics and $5,677 for black Americans.

There are, of course, many reasons for this. While minority families gained from the economic growth of the the 1980s, 1990s and mid-2000s, much of their wealth was tied up in their homes. When the housing market crashed in 2008, so did their net worth. Meanwhile, whites have been helped by the rebound in stock prices in the last two years. Stock market investments, including IRAs, 401(k)s and other market-based accounts, make up 28% of white Americans' wealth, vs. just 19% for blacks and 15% for Hispanics. If nothing else, these data point out the failure of federal welfare and anti-poverty policies to do what they intended: eradicate wealth differences in our country.

Today, some 44 million Americans are on food stamps. In 2007, it was 26 million. Treasury Secretary Tim Geithner recently boasted that U.S. issues more than 80 million checks a month. But while the U.S. has more than 70 means-tested welfare programs, the poverty rate today is higher than it was in the late 1960s. How can that be ?

Robert Rector, a Heritage Foundation economist in a recent report, said that most anti-poverty/welfare spending erodes work and marriage,' As a result ... low-income Americans are less capable of self-support than when the War on Poverty began.' ... The road to hell, it's said, is paved with good intentions. But sometimes it's paved with taxpayers' money."

Investor's Business Daily