The IRS confirmed Tuesday that illegal immigrants granted amnesty by President Barack Obama can soon start receiving tax refunds for money they earned while working in the United States. Now, a former Department of Justice tax lawyer says those unlawful immigrants could receive upwards of $24,000 in what's being called "amnesty bonuses."
Eileen J. O'Connor, former assistant attorney general for the Tax Division of the DOJ, explained her discovery during her congressional testimony for the Senate Homeland Security Committee, The Weekly Standard reported.
"The law makes a social security number a requirement of eligibility to receive the earned income credit," O'Connor said.
"But in 1999, the Chief Counsel's office of IRS ruled (in a non-binding, non-precedential way, but no one but the IRS pays attention to those disclaimers) that when a person receives a social security number, he can file amended returns to claim the credit for the three preceding years during which he did not."
"The logic is puzzling: the credit is not available if you don't have a social security number, but you can receive it retroactively for years during which you did not qualify for it because you didn't have a social security number," said O'Connor.
Sens. Benjamin Sasse, R-Neb., and Ron Johnson, R-Wis., wrote a letter to the inspector general of the U.S. Treasury Department regarding their concerns over the matter, The Weekly Standard reported.
By allowing illegal immigrants to receive tax refunds under the Earned Income Tax Credit, "the IRS may encourage fraud from those claiming children living in other countries. The administration may have blown open doors for fraud with amnesty bonuses of more than $24,000 to those who receive deferred action," Sasse said in a statement.
"This is basic economics: if you want more of something, you subsidize it. By subsidizing illegal entry with four years' worth of new tax credits, the IRS would promote lawlessness. This program severely undermines the White House's lip-service to enforcing the law and would increase the burden on law-abiding taxpayers."
Johnson, who is the chairman of the Homeland Security Committee, released his own statement offering similar concerns.
"Non-U.S. citizens who qualify for President Obama's temporary deferred actions will now be eligible to receive permanent Social Security numbers. A Social Security number is the key that opens a whole treasure chest of benefits, including significant tax credits," Johnson said.
"Most notably, qualifying applicants for the president's programs can now claim thousands - even tens of thousands - of dollars in payments from the Earned Income Tax Credit and, for some, the Additional Child Tax Credit. These two programs, which cost taxpayers $89.6 billion in 2013, were responsible for $21 billion in improper, potentially fraudulent payments that same year. Americans deserve to know where their taxpayer dollars are being spent and whether the Internal Revenue Service is failing to protect them from improper payments."
"We are concerned that because the president's new rules would let millions of people access these programs for the first time, the cost to the taxpayer could be billions of dollars," Johnson concluded.
