The Internal Revenue Service is reiterating that illegal immigrants granted Social Security numbers and work permits as a result of President Obama’s executive amnesty would be eligible to claim tax credits for up to three prior tax years for work they did illegally.
In a recent letter to Sen. Chuck Grassley (R-IA), IRS Commissioner John Koskinen refers to a hearing last month during which the Iowa Republican pressed the commissioner about the tax implications for those illegal immigrants granted amnesty.
“[We] have reviewed the relevant statutes and legislative history, and we believe that the 2000 [Chief Counsel advice] is correct,” Koskinen wrote. “The CCA concludes that a taxpayer may claim the earned income tax credit (EITC) for a taxable year using a social security number (SSN) acquired in a later taxable year.”
A recent Congressional Research Service report found that in the first year of amnesty, an amnesty beneficiary could potentially claim more than $35,000 in EITC and Child Tax Credits.
According to Grassley’s office, the average EITC in 2012 was some $2,300. The maximum EITC in 2014 was $6,143.
“Given the IRS’ interpretation of tax rules intended to prohibit undocumented workers from qualifying for the EITC, these individuals will be eligible to claim billions of dollars in tax benefits based on earnings from unauthorized work in the United States,” Grassley, the chairman of the Senate Judiciary Committee, responded Monday.
Grassley noted that he has started working on legislation to prevent the tax code from rewarding illegal work.
“With the stroke of a pen, the President rewarded those working illegally in the United States with a tax benefit that is designed to encourage low-income individuals to enter the workforce,” he added. “Given that the IRS is intent on standing by its present interpretation of the eligibility requirements, I’m working on legislation to uphold an important principle that many of us in Congress support.”
“The tax code shouldn’t reward those who broke our immigration laws,” he stressed.