Thursday, March 12, 2015
SS numbers used fraudulently, illegals getting tax breaks
More than 4,000 people availed of the government's employment-verification system using Social Security numbers belonging to people over the age of 112. Trouble is fewer than 40 people are known to have reached that age. That's one of the revelations from a review by the watchdog for the Social Security Administration.
The review also said there were approximately 6.5 million Social Security numbers linked to people 112 years of age or older. The reason, the review said: "SSA did not have controls in place to annotate death information on the ... records of numberholders who exceeded maximum reasonable life expectancies and were likely deceased."
According to the most recent data, there were fewer than 40 people worldwide who were living at 112 years, according to the Gerontology Research Group.
The review noted that in one case a man opened bank accounts using several different Social Security numbers — two of which belonged to number-holders born in 1869 and 1893, respectively. That would make one of them 145 years old and the other 121. The Social Security Administration's system indicated that both number-holders were alive.
Whatever one thinks of the President Obama’s aggressive executive action on immigration—which is still being litigated in the courts—tax refunds for the affected illegal immigrants has itself become controversial. The IRS says that illegals can file and claim refunds for the last three years under the Earned Income Tax Credit. That is the same refundable tax credit that is responsible for billions in fraudulent refunds. IRS Commissioner Koskinen confirmed this, explaining the seemingly bizarre result to Sen. Charles Grassley (R-Iowa).
What if you never reported any income or never filed a return? Under President Obama’s executive action, an illegal immigrant can: (1) get a Social Security number; (2) claim the Earned Income Tax Credit for the three open tax years; and (3) IRS sends three years of tax refunds. No matter that you never paid taxes, never filed a return, worked off the books, etc.
The IRS says this is the way the Earned Income Tax Credit works. IRS Commissioner Koskinen says the IRS is following a 15-year-old opinion that “a taxpayer may claim the Earned Income Tax Credit for a taxable year using a Social Security number 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.
Sen. Grassley vowed legislation to overturn the IRS position. “The tax code shouldn’t reward those who broke our immigration laws,” he said. So far, the President hasn’t backed down, so U.S. Rep. Patrick McHenry has introduced a bill to keep undocumented workers from receiving the Earned Income Tax Credit, a benefit for low- to moderate-income taxpayers.
“My bill is a direct result of the (IRS) announcement,” said McHenry, a Republican who represents the 10th District, which includes Gaston County. “It’s very simple. If you’re not here legally, you should not be able to access the Earned Income Credit. It’s for the American taxpayers who are trying to make ends meet.”
Illegals in the U.S. covered by President Obama’s recent action can apply for tax breaks going back three years. Rep. McHenry thinks there is a great chance for fraudulent returns, noting that even if undocumented workers were employed in the past, many may have used Social Security numbers that didn’t belong to them. That in itself is fraud.
[A video is embedded up top, but if you can't see it, you can view it here.]