Paul L. Caron
Dean




Thursday, April 14, 2016

IRS Admits It Encourages Illegals To Steal Social Security Numbers To Get Tax Refunds

IRS Logo 2Forbes:  IRS Admits It Encourages Illegals To Steal Social Security Numbers For Taxes, by Robert W. Wood:

This isn’t exactly the kind of story the IRS wants buzzing around at tax time. The IRS and Justice Department normally want ‘scared straight’ stories just before Tax Day. Ideally, when an indictment or conviction for tax evasion hits the news, it makes you think twice. Somehow, you think just a bit more about all those deductions, or if you really reported all your income, before you sign your return under penalties of perjury.

Instead, we have the top dog at the IRS, the IRS Commissioner himself, admitting that, well, there’s a problem with illegal immigrants and taxes. In fact, the top IRS official this time wasn’t talking about how the IRS wipes some hard drives or can’t find emails. He wasn’t even asking for a bigger budget to give bonuses to IRS employees.

This time, he was talking about illegal immigrants, and about the IRS turning a blind eye. Or maybe worse. The IRS actually wants illegal immigrants to illegally use Social Security numbers, he suggested.

IRS Commissioner John Koskinen made the surprising statement in response to a question from Sen. Dan Coats, R-Ind., at a Senate Finance Committee meeting. The question was a touchy one. Gee, is the IRS collaborating with taxpayers who file tax returns using fraudulent information? It wasn’t put exactly that way. According to Senator Coats:

What we learned is that … the IRS continues to process tax returns with false W-2 information and issue refunds as if they were routine tax returns, and say that’s not really our job. We also learned the IRS ignores notifications from the Social Security Administration that a name does not match a Social Security number, and you use your own system to determine whether a number is valid.

Commissioner Koskinen was asked to explain this. He suggested that as long as the information is being used only to fraudulently obtain jobs, the IRS was OK with it. In fact, he said that the IRS actually had an interest in helping the illegal immigrants to crook these rules. In fairness, perhaps it’s just the ‘that’s not my department’ response that abounds in big government. Perhaps this just isn’t the IRS’s problem, but it sure seems odd to have any agency chief encouraging illegal immigrant theft of SSNs.

You’ll love this next part. The IRS chief tried to distinguish between the various bad uses and misuses of someone else’s personal data. ... Of course, undocumented immigrants cannot legitimately get Social Security numbers, but it seems the IRS doesn’t care. Besides, they can file taxes with an Individual Taxpayer Identification Number. ITIN. They are not supposed to get the Earned Income Tax Credit, but they can receive the additional child tax credit. If the President succeeds in legitimizing the status of illegal immigrants, they could even get the Earned Income Tax Credit that is responsible for billions in fraudulent refunds

The recipe goes like this. First, get a Social Security number, then claim the Earned Income Tax Credit for the last three years. Then, wait for the IRS to send you three years of tax refunds. The gambit could apparently work even if you never paid taxes, never filed a return, and worked off the books. And the IRS says this is the way the Earned Income Tax Credit works.

https://taxprof.typepad.com/taxprof_blog/2016/04/irs-admits-it-encourages-illegals-to-steal-social-security-numbers-to-get-tax-refunds.html

IRS News, Tax | Permalink

Comments

Captain, what you say is true. However, this issue crosses paths with some rather high profile Administration policy matters on illegal immigration and IRS troubles with tax fraud and identity theft. It seems disingenuous to discount that. Even if the IRS policy was established some time ago, it's rather bad optics for the IRS and Administration to not respond to the concerns more appropriately now.

Posted by: ruralcounsel | Apr 19, 2016 6:13:50 AM

Timothy Kelly,

Presidents, including Obama, do not generally involve themselves in the minutia of Administrative Rule Making. Imagine if the President were to spend two hours of his time discussing the appropriate size of a truck mud flap.

Posted by: Captain Hruska Carswell, Continuance King | Apr 16, 2016 10:44:08 AM

What about the legitimate owners of these SSNs who are forced to defend themselves against a notice from the IRS that they did not report their income from a hotel or restaurant two thousand miles from their home. I thought the number one priority of the IRS was identity theft but here they are encouraging just that. Another anti-citizen initiative by the Obama administration.

Posted by: Timothy Kelly | Apr 16, 2016 8:31:38 AM

Interesting that the article doesn't actually quote the IRS guy. Perhaps a bit of spin doctoring here?

Posted by: Doug | Apr 15, 2016 11:10:46 AM

Exactly right, Dale.

Posted by: Mike Petrik | Apr 15, 2016 3:18:22 AM

What's really sad is the lack of outrage. I guess we're worn out after almost eight years.

Posted by: Dale Spradling | Apr 14, 2016 9:32:26 PM

Don't get your undies in a bunch here, move along folks, nothing to see. Typically, when a traffic offender driving without a valid driver's license picks up a DUI or other motor vehicle related crime, the Illinois Secretary of State CREATES a number for that offender. I have had clients tell me that they are not driving with a suspended driver's license because they never had one....They don't understand the constructive fiction that is created. Same thing happens here, I suspect, with the IRS.

Posted by: Captain Hruska Carswell, Continuance King | Apr 14, 2016 12:52:44 PM

The IRS knows how approximately many billions in EITC are going to people with stolen or made-up social security numbers. Just count the name mismatches.

If the IRS had not been captured by partisans, it would release this information to the public. But the IRS has a core principle of helping Democratic Presidents defy laws passed by Congress and, in support of that principle, hiding inconvenient facts from the public. I will gladly retract this assessment when the IRS tells us just how many billions of taxpayer money have been given away to people using bad SSNs.

Posted by: AMT buff | Apr 14, 2016 11:40:03 AM