An email showed up in my inbox today with a link to the video below.
For those of you without the six minutes necessary to spend watching the video, it’s an investigation done by an Indianapolis news station purporting to blow the cover of a terrible conspiracy, in which illegal aliens are using their taxpayer identification numbers to generate large refunds by claiming the child tax credit for kids who aren’t even located in the U.S. The video is done in hilariously formulaic exposé fashion, complete with blurred faces, leading questions, and the disapproving, accusatory tone typically reserved for people who sell undercooked food or use the public library’s computer to masturbate to internet smut.
Of course, the abuse of the child tax credit by illegal aliens is not new news, as the Treasury Inspector General for Tax Administration issued this report back in July of 2011 which highlighted just this abuse.
Yes, the problem is real. Yes, the IRS needs to stop the abuse. But it’s a logistical nightmare, because the problem stems from the fact that every person who is employed in the U.S. — citizen or not — is required by law to file a tax return. Under current law, those illegal aliens who cannot obtain a social security number can generally obtain an Individual Tax Identification Number (ITIN), and while the ITIN doesn’t enable a filer to claim an Earned Income Credit, they can claim an Additional Child Tax Credit, entitling the filer to a $1,000 refundable credit for each child.
Unless the IRS wants to devote significant resources to chasing down imaginary children of illegal aliens or verifying that the claimed children are in fact U.S. residents, the best course of action may be to revert the Child Tax Credit rules to their pre-“American Recovery and Reinvestment Act of 2009” rules, when the additional child tax credit was limited to 15% of earned income in excess of $12,550.