Tag Archives: Internal Revenue Service

NBC: Obama IRS refunds ‘Illegals’ $4.2 billion for kids–in Mexico (Yes, Even NBC, National Barack Channel, is concerned!)

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A follow-up on my previous post Illegal Immigrants Receive 4 BILLION Dollars Per Year in Taxpayer Money!!!

By  via The Examiner

Tax

This bombshell dropped on Monday in Washington, D.C., causing outrage throughout the halls of Congress, and now beyond, to the “genuine” taxpayers who have been robbed all across America.

Investigative television reporter Bob Segall of Indianapolis NBC affiliate WTHR TV Channel 13, was contacted by a long-time central Indiana tax preparer, who blew the whistle on a multi-billion dollar tax fraud about which the IRS has done nothing, according to the TV news show video segment that aired on Monday.

“There is not a doubt in my mind there’s huge fraud taking place here,” he said, slowly flipping through the pages of a [heavily redacted] tax return.

“We’re talking about a multi-billion dollar fraud scheme here that’s taking place and no one is talking about it,” he said.

The scheme involves illegal immigrants that are filing tax returns, claiming child credits for multiple dependents under their support in “their” U.S. household, and collecting enormous cash refunds–such as one persons tax return that showed income of over $14,000, who collected a cash refund of over $10,300.

In 1996 during the Clinton Administration, the Individual Tax Identification Number (ITIN) was created in order for both resident and non-resident aliens, regardless of immigration status, to fulfill their tax filing and payment obligations under IRS regulations–even though an ITIN does not confer the right to work and receive income in the United States.

This year tax preparation offices across the country were flooded by an estimated 2 million illegal immigrants, who in growing numbers have been taking advantage of a tax loophole called the Additional Child Tax Credit–a fully-refundable credit of up to $1000 per child–meant to ease the income tax burden on working families who have children living at home.

However, Segall’s investigation and reporting found many illegal immigrants who were claiming these tax credits, but for kids who live in Mexico–even listing nieces and nephews.

“We’ve seen sometimes 10 or 12 dependents, most times nieces and nephews, on these tax forms,” the whistleblower told Eyewitness News. “The more you put on there, the more you get back.”

After Segall reviewed many of the heavily redacted tax returns, it was still clear that the tax filers had received large tax refunds after claiming child tax credits for many dependents.

“Here’s a return right here: we’ve got a $10,3000 refund for nine nieces and nephews,” he said, pointing to the words “niece” and “nephew” listed on the tax forms nine separate times.

“We’re getting an $11,000 refund on this tax return. There’s seven nieces and nephews,” he said, pointing to another set of documents. “I can bring out stacks and stacks. It’s just so easy it’s ridiculous.”

Under agreement not to reveal their identity or filming them face on, Segall of WTHR was able to speak with several of the illegal immigrants who, using Segall’s translator–confirmed it is easy.

One of the workers, who was interviewed at his [appeared to be a 2 bedroom mobile home] in southern Indiana, admitted that four other illegal immigrants used his address to file tax returns–even though they don’t even live there.

These four workers claimed that not only they, but a total of 20 children between them–about 30 people–lived in the residence.

As a result, the IRS sent the illegal immigrants tax refunds totaling $29,608.

Upon Segall questioning the man regarding that incredible residency claim, he replied … “They don’t live here … the other kids are in their country of origin, which is Mexico,” later saying that none of the 20 children have ever visited the United States–let alone lived here.

Segall then asked why ‘undocumented workers’ should receive tax credits for children living in a foreign country, which is a violation of IRS tax rules?

“If the opportunity is there and they can give it to me, why not take advantage of it?”

Segall then met with Russell George, the U.S. Treasury Department’s Inspector General for Tax Administration, who stated … “The magnitude of the problem has grown exponentially,” but that the IRS has known about the problem for years.

Mr. George said his department has repeatedly warned the IRS that additional child tax credits are being abused by undocumented workers–in 2009 alone, their annual audit report showed that ITIN tax filers received about $1 billion in additional child tax credits.

The same audit report from 2010 showed it cost the American tax payers more than $4.2 billion.

“Keep in mind, we’re talking $4 billion per year.” George continued by saying “It’s very troubling” that the IRS has not taken any action on the matter–despite these multiple warnings from their own inspector general.

“Millions of people are seeking this tax credit who, we believe, are not entitled to it,” said the inspector general. “We have made recommendations to [IRS] as to how they could address this, and they have [still] not taken sufficient action in our view to solve the problem.”

Segall’s investigation revealed that claims for additional child tax credits by ITIN filers have skyrocketed during the past decade–from $161 million in 2001 to $4.2 billion in tax year 2010.

He also found that illegal immigrants filed 3.02 million tax returns in 2010, with 72% of those returns (2.18 million) claiming the additional child tax credit.

Segall’s attempts to speak with any of the 100,000 employees of the IRS were rebuffed; instead they emailed this statement…

“The law has been clear for over a decade that eligibility for these credits does not depend on work authorization status or the type of taxpayer identification number used.  Any suggestion that the IRS shouldn’t be paying out these credits under current law to ITIN holders is simply incorrect. The IRS administers the law impartially and applies it as it is written,” the statement said.

George disagrees with that position and believes the IRS should be doing more to prevent undocumented workers from getting billions in US tax dollars.

“The IRS is not doing something as simple as requesting sufficient documentation from people seeking this credit,” he said. “Once the money goes out the door, it’s nearly impossible for the IRS to get it back.”

Segall says that the IRS says it can’t change the system unless it gets permission from Congress; and closing this loophole requires lawmakers to pass a new law specifically excluding illegal immigrants from claiming additional child tax credits.

However, the IRS “Ten Facts About Child Tax Credit,” does not concur, as illegal immigrants, by definition, fail the citizenship qualification test.

Let’s remember, this is an election year, Barack Obama is CEO, Harry Reid can block any legislation in the Senate, and Treasury Secretary Tim Geithner, who is George Russell’s boss, is still claiming that Obamacare will reduce healthcare costs.

Tomorrow in my follow on article, learn how Congressmen are reacting to this incredible tax fraud–and what they intend to do about it.

For more click here.

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Illegal Immigrants Receive 4 BILLION Dollars Per Year in Taxpayer Money!!!

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This is absolutely unbelievable, but then again……An IRS loophole allows illegal immigrants to obtain over 4 billion dollars PER YEAR in tax payer money – an existing problem that the IRS is ignoring.   WTH?

VIDEO OF WHISTLEBLOWER!

H/T Black&White

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A Perfect Example Of A Bureaucracy Increasing It’s Own Scope – another example of government intrusion!

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By John Wiseman via Tea Party Nation

Via the Daily Caller today., I found this little snippet. It stands as that perfect example of the dangers of allowing government bureaucracies the authority to grant themselves power beyond their original mandates. This is one of the many bad things which happens when governments grow too big in both size and scope. Nobody has a handle on what they are up to, and the growth of the behemoth is uncontrollable, unwieldy, and impossible for anyone to predict what the next outrage will be. Some time last year, the undisputed king of big government recognized the ridiculousness of the problem and appointed one of his many federal czars to monitor the explosive growth of governmental overreach. Long time big government cheer leader Cass Sunstein, the man who proposed a holiday be observed on tax day each year to thank the big brother government for taking care of our every need, has been appointed by Barack Obama to tell little Barry when our federal over regulation becomes too onerous for the little people to bear it any longer. Somehow, I think he missed this latest attempt by the IRS to destroy the 350,000 small businesses who were giving tax preparation behemoths Jackson Hewitt, Liberty Tax Service, and H & R Block, some actual competition. There are many, namely the 350,000 individual tax preparers, and the Institute For Justice, who recognized this as the crony capitalism that it is.

To see the video, IRS Protectionism:  New Licensing Scheme Challenged in Major Federal Lawsuit, click here.

This is not an argument about whether or not tax preparers should be held to some standard by the people who employ them. It is an argument about who are the best people to establish that standard, and who benefits the most from this government’s intrusion into the market place, a place by the way our founding fathers worked so hard to create a society where the government would never be allowed to intrude upon. The fact is, there are already a bevy of regulations on the books, even before this power grab which were designed to insure that consumers were protected against tax preparation fraud. I do not remember reading a single story of how unsuspecting citizens were targeted by gangs of errant tax preparers and subsequently had their lives destroyed. This is about three very large corporations lobbying legislators to eliminate that pesky competition, and doing so under the guise of protecting the little guy. The little guy of course is the American Consumer.

What are the results of this going to be? One, each tax preparer is now forced to pay a licensing fee. The fee in this case is $150. While that may seem small, that will translate into a figure of over $100 Million being taken out of the market place and placed firmly into the coffers of the IRS. They of course get to include it as a part of their budget, and this will make them happy. The three large companies who do tax preparation will also be forced to pay their share of the fee, but for them, this is merely the cost of eliminating competition, and they will pass this extra expense onto their clientele, who now have fewer options of where to take their business. So, the big three are happy with this. We consumers on the other hand, we get to pick up the tab for all of this. Our tax preparation costs just went up, and all we have is a guy named Cass Sunstein in Washington to protect us from a malevolent big government, who as it turns out is actually in favor of a malevolent big government to begin with. That’s not all though. The IRS as it turns out is offering, at a prohibitive cost of course, a class to train the tax preparers how to pass their test in order to become licensed. The class costs money, which of course enriches the IRS, and taking the test costs money, and guess who profits from that as well. As it turns out, this new government regulation is also a big money maker for the bureaucracy who inflicted it upon us, as they all are. The whole scheme is just another tax which is called something else, lest we realize it is a tax. These little bombshells are literally all over our daily lives, fees, licenses, little additions to the cost of our everyday lives, all designed to incrementally tax us without our realizing it. More than 53% of Americans are paying a Federal Tax. Only 53% of Americans realize it as such.

Another thing to consider is this. Who gave the IRS this authority? What part of their charter and establishment gives them the power to create their own legislation, and inflict their own power of taxation upon the public? Before anyone answers that I don’t know what I am talking about, that taxes are so important that only knowledgeable preparers should be allowed to perform this financial rocket surgery, keep this in mind. I myself have my taxes done by a CPA. That is my choice. CPA’s are more expensive than other preparers. I have made it my business to inquire about the qualifications of the person doing my taxes. I also recognize that many people in our society do not wish to pay the price that a CPA might charge to have their taxes done by this level of professional. That is not my business. By chasing the lower cost preparers from the market place, the very people who the IRS claims to be helping are hurt the most. The lower cost choice has now been removed from the market place, and in subsequent years, every level of preparer left will be raising their prices accordingly. They now have increased costs to pass on, as well as increased demand for their limited time.

Our government has run amok. The march of onerous regulation moves forward, and we are allowing ourselves to be distracted by asinine debates such as whether or not Gay People can ruin their lives or not by getting married or not. When Barack Obama was inaugurated in January of 2009, our nation ranked as the 4th most economically free society in the world today, a list in which we once held the number 1 spot. Today, we sit at number 10 on that list, and I am afraid to think of where we will be in 4 years if this little man child President were to be elected for another term. These are the kinds of things which should be hammered relentlessly during the fall’s general election. These are winning campaign issues.

For more information click here.

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Obama Administration Supports Rogue IRS Regulation in Order to Please Europeans

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By Daniel J. Mitchell

I’ve written several times about a proposed IRS regulation that would force American banks to put foreign law above U.S. law. I’ve repeatedly warned that the scheme, which would force financial institutions to report the deposit interest they pay to foreigners, is bad economic policy, bad regulatory policy, and bad banking policy.

My arguments have included:

But these points don’t seem to matter to the Obama Administration, which is ideologically committed to the anti-tax competition agenda of Europe’s welfare states. This is why the White House supports all sorts of destructive policies, including not only this misguided regulation, but also the creation of something akin to a world tax organization that will have power to block free-market tax policy.

A new article in the Weekly Standard explains what’s at stake.

Early last year the Treasury Department published its “Guidance on Reporting Interest Paid to Nonresident Aliens,” which would require banks to report to the Internal Revenue Service the interest paid to foreign depositors with a U.S. bank account. While the Treasury and the regulatory apparatus insist that the cost and inconvenience of adhering to this regulation is next to nothing, the rule may cost the U.S. banking system hundreds of billions of dollars in lost deposits, in turn costing our economy billions of dollars, while providing no discernible benefit to banks, depositors, taxpayers, or the U.S. economy. …a much bigger problem—for banks and the economy—than the compliance costs is the threat of a massive capital flight. The United States is a very popular place for foreigners to park their savings, for a variety of reasons. For starters, we offer a stable government that can be trusted to keep its hands off deposits—something that appeals greatly to residents of Venezuela, Argentina, Ecuador, and any number of other unstable countries. …As a result, a staggeringly large amount of savings from abroad is currently held in U.S banks. While the Treasury asserts that “deposits held by nonresident alien individuals are a very small percentage of the [total] deposits held by U.S. financial institutions,” that very small percentage amounts to more than $3.7 trillion, according to a 2011 Bureau of Economic Analysis report, hardly a pittance. The massive amount of foreign savings here is a boon to the U.S. economy. Banks lend against these deposits, mainly to companies here in the United States. Jay Cochran, an economist at George Mason University, studied the impact that the more limited 2002 reporting requirements would have had on the banking system, estimating that it would have resulted in nearly $100 billion in deposits leaving the U.S. banking system. A reporting regulation that covers all foreign accounts would likely result in two to three times more capital flight. The impact would be harmful not just for the banks but for the broader economy. The decline in profits in the banking sector alone from a roughly quarter-trillion-dollar capital flight would be in the range of $5-10 billion—which makes a mockery of the notion that the costs of the regulation are under $100,000.

For more information about this wretched proposal, here’s a video I narrated on the topic.

To put it bluntly, the Obama Administration is pushing this regulation because it thinks the anti-tax competition agenda of Europe’s welfare states is so important that it is willing to risk the health of the American economy, undermine the soundness of U.S. financial institutions, disregard the rule of law, and abuse the regulatory process.

Indeed, this proposal is even worse than the increasingly infamous Foreign Account Tax Compliance Act.

And that’s saying something, because with each passing day, it is more and more obvious that FATCA is a destructive law that will significantly harm the American economy. But at least it’s a law, one that was approved by Congress and signed by the President. And the costly FATCA regulations being developed by the IRS are for the purpose of enforcing the law.

The interest-reporting IRS regulation is also costly and destructive, to be sure, but what makes it so perverse is that it is – at best – completely gratuitous. It is being advanced solely for reasons of ideology, regardless of the law and consequences be damned.

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