POSTED: Monday, May 14, 2012 - 4:38pm
UPDATED: Friday, June 29, 2012 - 7:12am
We all have to deal with the 10-40 form every year.
And most of us use our social security number when we file.
But back in 1996, Congress decided that workers here illegally should pay taxes as well, and they created the Individual Taxpayer Identification number or ITIN.
And believe it or not, the numbers get used and taxes are paid.
And that number has increased from under 100,000 in 1996 to nearly 2 million filers in 2010.
But there is a new wrinkle…maybe scam is the word, that is costing the government billions every year.
It’s called the Additional Child Tax Credit and it’s meant to give workers an additional $1000 each for children living in their home at least 6 months of the year.
It turns out that many undocumented workers are claiming many more children than they actually have.
And a lot of them are still in Mexico.
In some cases, upwards of 10 children or more are claimed as dependents and that means returns of $10,000 or more.
And no one asks any questions. The checks are simply sent out.
The US Inspector General’s office sent the Internal Revenue Service a full report on the problem back in 2009.
They got no reply, and neither did any other whistleblower.
The IG’s estimate is that this costs the government over $4-billion dollars every year.
The IRS is actually refunding more money to these undocumented workers than the workers pay in taxes.
In short, every April 15th, these taxpayers make a profit.
The IRS has said it’s the law, and any further demands for proof that these kids actually exist and live with the taxpayer, must be put into law.
So, how hard will it be to get the law changed?
We’ll talk about that, in part 2.