IRS defends giving tax refunds to illegals who didn’t pay any taxes
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.
How does this encourage illegals to pay taxes? Or go home, for that matter. Perhaps threatening to prosecute illegals who work off the books and don’t pay taxes would be better than beefing up border security..
But no, we have to coddle them.
Here’s another quirk in the law:
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.
During the debate over the Senate’s immigration bill, Senator Grassley and others demanded that before illegals could be put on a path to citizenship, they must pay back all the taxes they owe. But Democrats scotched that idea. And the president couldn’t include it in his executive orders because it’s not the executive’s place to say who has to pay how much in taxes.
Or is it?
White House Press Secretary Josh Earnest confirmed Monday that President Obama is “very interested” in the idea of raising taxes through unitlateral executive action.
“The president certainly has not indicated any reticence in using his executive authority to try and advance an agenda that benefits middle class Americans,” Earnest said in response to a question about Sen. Bernie Sanders (I-VT) calling on Obama to raise more than $100 billion in taxes through IRS executive action.
“Now I don’t want to leave you with the impression that there is some imminent announcement, there is not, at least that I know of,” Earnest continued. “But the president has asked his team to examine the array of executive authorities that are available to him to try to make progress on his goals. So I am not in a position to talk in any detail at this point, but the president is very interested in this avenue generally,” Earnest finished.
As recently as last November, the president said that he couldn’t raise taxes by executive order. So I guess his position on that is “evolving.”