Alabama's Sessions supports ending tax loophole that illegal immigrants can use
Alabama's Sessions supports ending tax loophole that illegal immigrants can use
Published: Tuesday, May 15, 2012, 11:22 PM
Updated: Tuesday, May 15, 2012, 11:22 PM
Mary Orndorff -- Washington Bureau By Mary Orndorff -- Washington Bureau
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Alabama Sen. Jeff Sessions
WASHINGTON -- A loophole in the tax law that allows illegal immigrants to claim certain tax credits would be closed by legislation that Sen. Jeff Sessions said Tuesday he will endorse.
People who work but don't have a valid Social Security number receive an Individual Tax Identification Number because their income is still taxed. And they can use that number to claim the Additional Child Tax Credit, which is meant for lower-income working families.
A 2011 report by the Treasury Inspector General for Tax Administration found that $4.2 billion in the refundable tax credits were paid to 2.3 million people without Social Security numbers in 2010 alone.
"The payment of federal funds through this tax benefit appears to provide 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," the inspector general wrote.
The report, which also showed a significant increase in the payments in recent years, was issued last summer and Congress has recently renewed debate on whether to change the law. Sessions, an Alabama Republican who is especially vocal on issues involving illegal immigration, said Tuesday that he'll back a bill from Sen. David Vitter, R-La., to require recipients of the additional child tax credit to have a valid Social Security number.
"It's the kind of thing that is particularly bad because it costs a lot of money and it is another magnet for illegality," Sessions said in an interview at the U.S. Capitol. "You're rewarding financially people for illegal conduct which is a doubly unwise thing."
The Child Tax Credit allows a taxpayer to reduce his federal income tax by a certain amount per child up to $1,000. If the amount of the credit is greater than the amount of income tax owed, the taxpayer may be able to claim the Additional Child Tax Credit, which is refundable. The audit said the total refunds under the Additional Child Tax Credit paid in 2010 were $28.3 billion.
The American Recovery and Reinvestment Act that Congress passed in 2009 to stimulate the economy enables more families to be eligible for the additional child tax credit, which is part of the reason for the increase in refunds. Some taxpayers also filed returns for multiple years to obtain the additional child tax credit for prior tax years, the audit states, which also accounts for some of the increase.
The average amount claimed for the additional child tax credit in 2010 was about $1,800, the inspector general said.
The Internal Revenue Service, in its response to the inspector general's report, said Congress would have to change the law in order to prevent unauthorized workers from receiving the credit. Vitter's bill, which he introduced last year, would treat the child tax credit just like the Earned Income Tax Credit and require a valid Social Security number in order to claim it.
The House Ways and Means Committee passed a provision similar to Vitter's bill earlier this year over the objections of the Democratic members. The National Council of La Raza also opposes legislation to end the refundable tax credits for those without Social Security numbers in part because it helps lower income families, some of whose members may be legal citizens, to support their children.
"Proposals to make ITIN taxpayers ineligible amounts to a targeted attack on the Latino community, and will be widely felt since one out of four Hispanic children will be affected," according to a statement from the National Council of La Raza. The average household income of people without Social Security numbers that claimed the refundable child tax credit in 2010 was $21,240, according to the organization.
Alabama's Sessions supports ending tax loophole that illegal immigrants can use | al.com
