As the federal government starts issuing coronavirus-relief payments to households across America, the Treasury Department says that only legal U.S. residents will receive them.That assurance is far from ironclad, however. Payments are based on federal income tax returns, and illegal aliens are among those who file. Recent Internal Revenue Service data show that the agency processed 4.4 million tax returns from people without Social Security numbers (SSNs). Untold millions more are filed with stolen or bogus SSNs. Many of these returns were submitted to get the Additional Child Tax Credit (ACTC) or the Earned Income Tax Credit (EITC), (a cash payment from the government that they are supposed to be barred from receiving) or both.
Intended for legal U.S. residents, the two programs pay out, even if no taxes are owed or paid. An Inspector General’s report found that more than 2.3 million persons without valid Social Security numbers got an average of $1,800 each in 2010 from ACTC. They claimed their cash via Individual Taxpayer Identification Numbers, which illegal residents can obtain from the IRS. EITC is also rife with abuse and outright fraud.
“Technically, only people authorized to work in the U.S. are eligible for the credit. But identity theft, stolen Social Security numbers and scams involving ITINs effectively nullify the restriction. As a result, illegal aliens receive the EITC at even greater rates than legal immigrants,” writes economist Edwin S. Rubenstein. “The IRS does little to verify the validity of Social Security numbers on tax returns, or the existence of immigrant children, or to ascertain that they’ve lived with the taxpayer for more than six months as required by law. Illegal alien husbands and wives often file separate returns in which both claim the same children.”
Don’t just take Rubenstein’s word for it. The IRS itself estimates that 21 percent to 26 percent of EITC claims are paid in error, and the agency admits it “does not have the resources to examine all of the questionable EITC returns.” It is nice that Congress has decided illegal aliens should not be eligible for coronavirus aid, but based on precedent there will need to be tighter procedures and strict penalties to prevent them from cashing in.