And in the end, they make the following statement: “This does not mean that the negative fiscal impact of illegal immigration is $3.3 to $15.6 billion annually. It merely means that using the correct numbers massively reduces their cost estimate.”
So cutting to the bottom line, this statistical manipulation used by both sides comes to this. Illegal immigration is a fiscal drain on the system.
As we end this segment, it is best put by the Center for Immigration Studies in an article from October 28 titled “Enforcing Immigration Law Is Cost Effective”:
The reason illegal immigrants are unambiguously a net fiscal drain is that less-educated people, native-born or immigrant, earn on average modest wages and as a result they tend to make modest tax contributions, while needing significant social services. As we pointed out in our prior study, research by the Center for Immigration Studies, the Pew Research Center, the Heritage Foundation, and others have all found that a very large share of illegal immigrants have relatively few years of schooling—most have not completed high school or have only a high school education. The fiscal drain illegal immigrants create is not because they are all lazy and on welfare, nor it simply because they often work off the books and don’t pay taxes. Rather they tend to earn wages commensurate with their education levels and, as result, they typically have low incomes on average, though there are individual exceptions. Those with low incomes as a group, regardless of legal status, use more in public services than they pay in taxes. It’s why cities and states worry so much about losing their middle- and upper-income tax base. It is middle- and upper-income residents who pay most of the taxes, which does not describe the average illegal immigrant.
ITINs (individual tax identification numbers)
The ITIN program was created by the IRS in July 1996 so that foreign nationals and other individuals who are not eligible for a social security number (SSN) can pay the taxes they are legally required to pay.
The application process is designed to facilitate tax payment, and the fact that the IRS does not share applicants’ private information with immigration enforcement agencies is key to tax compliance.
What you see
An article from the American Prospect titled “Denying the Child Credit to Undocumented Children” was released on June 28, 2018.
Its focus is a little-noticed provision in the Republican tax reform that stripped billions in tax benefits from an estimated one million mostly low-income undocumented children residing in the United States.
It goes on and states this:
Currently, unauthorized immigrants are able to claim the credit by applying for a nine-digit Individual Taxpayer Identification Number, or ITIN, which allows them to file state and federal tax returns, even without a Social Security number. The new requirement, which will go into effect next year, will render ineligible roughly one million undocumented children, according to a Center on Budget and Policy Priorities analysis of data from the Pew Hispanic Center.
The change threatens to inflict greater poverty on a mostly low-income working population that depends heavily on such credits. In 2013 alone, some 4.4 million tax returns were filed using ITINs, claiming child tax credits worth $6 billion, according to a report on refundable tax credits by the Government Accountability Office (GAO). Almost a third of ITIN filers claiming child tax credits that year had incomes of less than $40,000. Most ITIN-filers are undocumented.
It added that “eliminating all access to tax benefits for undocumented immigrants has long sat atop the wish list of many conservatives, who have vilified undocumented immigrants and accused them of large-scale tax fraud. But the Republicans have displayed a studied disinterest in the large-scale tax frauds by the rich, which will only be intensified by the Tax Act.”
That’s a pretty dark picture, but there’s some facts that seem to be neglected in this rendition of illegal immigrants being victimized.
The complete story
In the 2010 processing year, more than three million returns were filed with ITINs. Of these, 2.3 million paid no federal income taxes and collected an aggregate of $4 billion from the Treasury in refundable tax credit money from the ACTC. Of those who did not file for the ACTC, most used the CTC to reduce or eliminate their tax liability and thereby recover all or part of any federal income tax money withheld by employers. Of all the 2010 ITIN filers, fewer than one-quarter paid any federal income taxes, which amounted to about $0.87 billion in total. Thus, on a net basis, ITIN filers gained $3.13 billion ($4.0 billion minus $0.87 billion) from the IRS in the 2010 processing year. An approximation of the total net outflow of IRS funds to ITIN filers for the 2005–2010 processing years comes to 7.37 billion.
(Source: Center for Immigration Studies.) Illegal Immigration receive billions of dollars more from the IRS than they pay in.
Tax Loopholes Cost Billions 13 Investigates WTHR
Published April 26, 2012—updated December 2, 2016
INDIANAPOLIS—Inside his central Indiana office, a longtime tax consultant sits at his desk, shaking his head in disbelief.
“There is not a doubt in my mind there’s huge fraud taking place here,” he said, slowly flipping through the pages of a tax return.
The tax preparer does not want you to know his name for fear of reprisal, but he does want you to know about a nationwide problem with a huge price tag.
He came to 13 Investigates to blow the whistle.
“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—illegal immigrants who are filing tax returns.
How it works
The Internal Revenue Service says everyone who is employed in the United States—even those who are working here illegally—must report income and pay taxes. Of course, undocumented workers are not supposed to have a social security number. So for them to pay taxes, the IRS created what’s called an ITIN, an individual taxpayer identification number. A 9-digit ITIN number issued by the IRS provides both resident and nonresident aliens with a unique identification number that allows them to file tax returns.
While that may have seemed like a good idea, it’s now backfiring in a big way.
Each spring, at tax preparation offices all across the nation, many illegal immigrants are now eagerly filing tax returns to take advantage of a tax loophole, using their ITIN numbers to get huge refunds from the IRS.
The loophole is called the Additional Child Tax Credit. It’s a fully-refundable credit of up to $1000 per child, and it’s meant to help working families who have children living at home.
But 13 Investigates has found many undocumented workers are claiming the tax credit for kids who live in Mexico—lots of kids in Mexico.
“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.”
The whistleblower has thousands of examples, and he brought some of them to 13 Investigates. While identifying information such as names and addresses on the tax returns was redacted, it was still clear that the tax filers had received large tax refunds after claiming additional 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.