IRS Again Confirms Amnesty Bonus, Grassley Working On Bill To Address
by Caroline May
2 Mar 2015
361 comments
The Internal Revenue Service is reiterating that illegal immigrants granted Social Security numbers and work permits as a result of President Obama’s executive amnesty would be eligible to claim tax credits for up to three prior tax years for work they did illegally.
In a recent letter to Sen. Chuck Grassley (R-IA), IRS Commissioner John Koskinen refers to a hearing last month during which the Iowa Republican pressed the commissioner about the tax implications for those illegal immigrants granted amnesty.
“[We] have reviewed the relevant statutes and legislative history, and we believe that the 2000 [Chief Counsel advice] is correct,” Koskinen wrote. “The CCA concludes that a taxpayer may claim the earned income tax credit (EITC) for a taxable year using a social security number (SSN) acquired in a later taxable year.”
A recent Congressional Research Service report found that in the first year of amnesty, an amnesty beneficiary could potentially claim more than $35,000 in EITC and Child Tax Credits.
According to Grassley’s office, the average EITC in 2012 was some $2,300. The maximum EITC in 2014 was $6,143.
“Given the IRS’ interpretation of tax rules intended to prohibit undocumented workers from qualifying for the EITC, these individuals will be eligible to claim billions of dollars in tax benefits based on earnings from unauthorized work in the United States,” Grassley, the chairman of the Senate Judiciary Committee, responded Monday.
Grassley noted that he has started working on legislation to prevent the tax code from rewarding illegal work.
“With the stroke of a pen, the President rewarded those working illegally in the United States with a tax benefit that is designed to encourage low-income individuals to enter the workforce,” he added. “Given that the IRS is intent on standing by its present interpretation of the eligibility requirements, I’m working on legislation to uphold an important principle that many of us in Congress support.”
“The tax code shouldn’t reward those who broke our immigration laws,” he stressed.
http://www.breitbart.com/big-governm...ll-to-address/
IRS defends paying refunds to illegals who never filed taxes
By Stephen Dinan - The Washington Times - Monday, March 2, 2015
The IRS is defending its decision to let illegal immigrants claim up to three years' refunds on income even if they never paid income taxes, telling Congress in a new letter last week that agency lawyers have concluded getting a Social Security number triggers the ability to go back and ask for previous refunds.
President Obama's new deportation amnesty could grant Social Security numbers to as many as 4 million illegal immigrants, making many of them eligible for tax refunds under the Earned Income Tax Credit even for years when they cheated on their taxes, by working off the books and not filing tax returns.
"Section 32 of the Internal Revenue Code requires an SSN on the return, but a taxpayer claiming the EITC is not required to have an SSN before the close of the year for which the EITC is claimed," IRS Commissioner John Koskinen wrote in his letter to Sen. Charles E. Grassley on Wednesday.
The IRS's chief lawyer had reached that conclusion in 2000, and the agency has newly confirmed it, Mr. Koskinen said.
Mr. Grassley called that a mockery of the law and said he will try to write a bill specifically prohibiting it.
"The tax code shouldn't reward those who broke our immigration laws," the Iowa Republican and chairman of the Senate Judiciary Committee said in a statement.
The tax issue has become one of several flash points over Mr. Obama's deportation amnesty, which grants tentative legal status, Social Security numbers and work permits to illegal immigrants who qualify. The newly legalized workers would also likely be eligible for driver's licenses, and could even be more attractive than native-born workers to some employers trying to figure out ways to save money under Obamacare mandates.
Mr. Koskinen has previously said that illegal immigrants must be able to prove they worked off-the-books in order to claim the EITC, and it's unclear how many of the population Mr. Obama is aiming to cover would be able to offer such proof.
The three-year time frame is part of general tax law, allowing anyone who didn't file to go back and claim a refund for up to three previous year's worth of taxes.
But the IRS lawyer's ruling creates an odd circumstance where illegal immigrants who cheated by not paying taxes before can see if they would benefit from refunds. If they do benefit, they could file, but if they don't benefit they could continue to avoid taxes for those years.
Mr. Obama's new amnesty program does not require payment of back taxes.
Congress is currently snared in a fight over Mr. Obama's deportation amnesty, with House Republicans insisting it be ended and trying to tie continued funding for the Homeland Security Department to provisions that would halt the amnesty.
Democrats are universally opposed, and Senate Republicans, caught in the middle, have begun to side with Democrats, arguing that homeland security money must keep flowing no matter what.
A federal court has put Mr. Obama's expanded amnesty on hold, finding that the president likely skirted federal law in issuing the new policy without first going through a period of public comment and review.
http://www.washingtontimes.com/news/...r-filed-taxes/
Obama Immigration Fix: 4M Illegals Who Never Paid U.S. Tax, Get 3 Years Of Tax Refund
Obama Immigration Fix: 4M Illegals Who Never Paid U.S. Tax, Get 3 Years Of Tax Refunds
3/03/2015 @ 8:22AM
Robert W. Wood
You have to admit it sounds crazy. The normal rule is that the IRS can audit for three years, so you can usually go back three years to amend your return or claim a credit you forgot. What if you never had any income or never filed a return? Just wait. Since an illegal immigrant under President Obama’s executive action can now get a Social Security number, the immigrant road map is clear.
First, get the Social, then claim the Earned Income Tax Credit for the three open tax years, and Voila! IRS sends you three years of tax refunds. Welcome to America! No matter that you never paid taxes, never filed a return, worked off the books, etc. All sins forgiven. And the IRS says this is the way the Earned Income Tax Credit works. Recall that the Earned Income Tax Credit—EITC to those in the tax biz—is the one that is responsible for billions in fraudulent refunds.
In that sense, this is just one more accolade for the EITC. If this sounds too good to be true, or too strange to be possible, check out what the IRS says about the Earned Income Tax Credit, including this list of questions and answers. It makes you wonder if he knew in advance of the tax refund bonanza for illegal immigrants or this is just gravy. Regardless, Republicans are not happy with the President or the IRS Commissioner.
Commissioner Koskinen may just be the messenger, though he does not appear to mind doing the President’s bidding. Mr. Koskinen explained the seemingly bizarre result to Sen. Charles Grassley (R-Iowa). Mr. Koskinen says the IRS is following a 15-year-old opinion that “a taxpayer may claim the Earned Income Tax Credit (EITC) 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. He vowed to push legislation to overturn the IRS position. “The tax code shouldn’t reward those who broke our immigration laws,” he said. Of course, there are many other reasons that the President’s executive action on immigration remain highly controversial.
So far, the President hasn’t backed down on changing our immigration laws by himself. A court battle over the executive action is underway. As a result, the court has temporarily put the President’s plans on hold. Yet more than tax dollars are at stake.
If the President’s executive action is ultimately upheld by the courts, the illegal immigrants in question would not only get Social Security numbers, and now tax refunds. They would apparently be entitled to driver’s licenses. Moreover, some commentators have suggested that Obamacare could make illegal immigrants more attractive to hire than U.S. born workers. Kafka must be taking notice.
http://www.forbes.com/sites/robertwo...f-tax-refunds/
Veteran U.S. senator to IRS: No tax breaks for undocumented immigrants
Published March 06, 2015
Fox News Latino
A veteran U.S. senator from Iowa says he plans to push legislation that would overturn a policy allowing undocumented immigrants who qualify for a three-year deportation waiver under President Barack Obama’s executive order to earn tax refunds.
Sen. Charles Grassley, a Republican, says it’s wrong for people who have broken the law to be entitled to something such as refunds, according to the Wall Street Journal.
Grassley had written to Internal Revenue Services Commissioner John Koskinen seeking information about whether undocumented immigrants who qualify for Obama’s executive action would be able to claim what is known as Earned Income Tax Credit, which provides cash payments to people who are low-income earners.
Koskinen confirmed that undocumented immigrants who qualify for the president's deportation deferral may qualify for the tax break once they get Social Security numbers. They could also amend tax returns to claim refunds retroactively for the prior three years.
Grassley says he won’t have it.
“These individuals will be eligible to claim billions of dollars in tax benefits based on earnings from unauthorized work in the United States,” Grassley said, according to the Journal. “The tax code shouldn’t reward those who broke our immigration laws.”
Under Obama’s executive action, deportation is waived for up to three years for
undocumented immigrants who were brought to the United States before the age of 16, as well as for those who have children who are U.S. citizens or legal permanent residents.
Those who are eligible may obtain work permits and driver’s licenses. They could also qualify for many government benefits and receive a Social Security number.
Undocumented immigrants long have been able to get refunds from the IRS using an alternative to the Social Security number – the Individual Taxpayer Identification number, or ITIN. They are required to file tax returns, regardless of their immigration status.
Many others get taxes withdrawn from their paychecks under Social Security numbers that are not theirs, and consequently do not receive refunds or Social Security benefits.
The Earned Tax Income Credit is paid to workers who don’t earn enough to pay taxes, the Journal said.
Undocumented immigrants also for years have been able to get child tax credit refunds, something else that several Republican lawmakers want to change.
In answer to Grassley’s letter regarding the tax breaks, Koskinen responded that the IRS is simply following guidelines that are more than a decade old.
“A taxpayer may claim the Earned Income Tax Credit (EITC) for a taxable year using a social security number (SSN) acquired in a later taxable year,” according to Koskinen.
http://latino.foxnews.com/latino/pol...ed-immigrants/
Grassley Rolls Out Bill to Stop Back Tax Credits for Illegals Granted Executive Amnes
Grassley Rolls Out Bill to Stop Back Tax Credits for Illegals Granted Executive Amnesty
by Caroline May
10 Mar 2015
Sen. Chuck Grassley (R-IA) says he will introduce legislation to prevent illegal immigrants from obtaining tax credits for illegal work once they have been granted Social Security numbers under President Obama’s executive amnesty Tuesday.
“Today, I am introducing legislation with Sen. [Mike] Enzi (R-WI) and a few other senators to close a tax loophole that could mean billions of dollars in tax benefits going to individuals based on work that they performed illegally in the United States,” Grassley, the chairman of the Senate Judiciary Committee, said on the Senate floor Tuesday.
In recent weeks, the Internal Revenue Service has confirmed that once illegal immigrants are granted Social Security numbers–as a result of Obama’s executive actions–they will be able to file tax returns for up to three years of back taxes and claim the Earned Income Tax Credit (EITC) for work performed illegally.
According to Grassley, the ability to claim back tax credits for illegal work represents a loophole in the law that Congress never intended. Tuesday, he cited Congress’ determination in 1996 that the EITC should be “denied to individuals not authorized to be employed in the United States.”
“Obviously, if the object of the earned income tax credit is to encourage work, it makes no sense to provide such an incentive to those who are not legally allowed to work,” Grassley said. “Why would we want to encourage individuals to break our immigration laws?”
The Iowa lawmaker pointed out that in 1996, when Congress decided that the way to prevent illegal immigrants from claiming the EITC would be to require claimants to provide a Social Security number, they did not foresee executive amnesty.
“What Congress didn’t know at the time was that an unknown–at an unknown future date, a President, with the stroke of a pen, would essentially grant millions of undocumented workers amnesty,” Grassley said. “Under the President’s action, those previously working illegally in the United States will be eligible for work authorization and a Social Security number.”
He went on to argue that his proposal would simply extend Congress’ intent to prohibit benefits from going to illegal work. Those granted amnesty could still claim the EITC for future legal work.
“This bill should be a no-brainer for any of my colleagues that agree we should not be rewarding individuals for breaking our immigration laws and our employment laws,” he said.
http://www.breitbart.com/big-governm...utive-amnesty/
Amnesty Beneficiaries Would Be Able To Receive Social Security Benefits For Illegal W
Amnesty Beneficiaries Would Be Able To Receive Social Security Benefits For Illegal Work
by Caroline May
11 Mar 2015
Undocumented immigrants granted work permits as a result of President Obama’s executive amnesty would be able to claim Social Security benefits for work performed illegally, according to a new Congressional Research Service memo.
The CRS memo, issued at the request of the Senate Judiciary Committee this week, confirms that amnesty beneficiaries would not only be able to claim Social Security benefits but would be able to receive credit for work they did before their status was adjusted. In other words, illegal work.
“Under the November 20, 2014, policy memorandum, foreign nationals who receive deferred action status may be eligible for work authorization,” the memo reads. “As a result, a foreign national who receives deferred action status may be able to have all of his or her Social Security-covered earnings count toward qualifying for a Social Security benefit (all earnings from authorized and unauthorized work).”
The report notes that while undocumented immigrants granted amnesty will technically be able to receive credit toward their Social Security benefit calculation, it could be difficult to prove their earnings — ironically because they would have been accruing benefits for a stolen or false Social Security number.
“[I]t is unclear how easy it will be for a foreign national to prove that earnings credited to a Social Security number that was not issued to the foreign national (i.e., credits earned while the person was working without authorization) belong on his or her earnings record,” the report reads.
Interestingly still, in terms of Social Security benefit policy, foreign nationals granted Social Security benefits do not even need to be in the U.S. to claim those benefits.
“Notably, the concept of lawfully present is only a factor when an alien is trying to receive a benefit payment in the United States. In many situations, foreign nationals who qualify for a Social Security benefit are able to receive benefits outside the country,” the report notes.
The CRS memo comes on the heels of revelations that amnesty beneficiaries will also be able to claim up to three years of earned income tax credits — before they were granted deferred status and a Social Security number — for work performed illegally.
Tuesday Sen. Chuck Grassley (R-IA), the chairman of the Senate Judiciary Committee introduced a bill to prevent illegals granted amnesty from claiming the EITC for illegal work.
“Obviously, if the object of the earned income tax credit is to encourage work, it makes no sense to provide such an incentive to those who are not legally allowed to work,” Grassley said on the Senate floor. “Why would we want to encourage individuals to break our immigration laws?”
http://www.breitbart.com/big-governm...-illegal-work/
