Grassley Rolls Out Bill to Stop Back Tax Credits for Illegals Granted Executive Amnesty

Tom Williams/CQ Roll Call/AP
Tom Williams/CQ Roll Call/AP

Sen. Chuck Grassley (R-IA) says he will introduce legislation to prevent illegal immigrants from obtaining tax credits for illegal work once they have been granted Social Security numbers under President Obama’s executive amnesty Tuesday.

“Today, I am introducing legislation with Sen. [Mike] Enzi (R-WI) and a few other senators to close a tax loophole that could mean billions of dollars in tax benefits going to individuals based on work that they performed illegally in the United States,” Grassley, the chairman of the Senate Judiciary Committee, said on the Senate floor Tuesday.

In recent weeks, the Internal Revenue Service has confirmed that once illegal immigrants are granted Social Security numbers–as a result of Obama’s executive actions–they will be able to file tax returns for up to three years of back taxes and claim the Earned Income Tax Credit (EITC) for work performed illegally.

According to Grassley, the ability to claim back tax credits for illegal work represents a loophole in the law that Congress never intended. Tuesday, he cited Congress’ determination in 1996 that the EITC should be “denied to individuals not authorized to be employed in the United States.”

“Obviously, if the object of the earned income tax credit is to encourage work, it makes no sense to provide such an incentive to those who are not legally allowed to work,” Grassley said. “Why would we want to encourage individuals to break our immigration laws?”

The Iowa lawmaker pointed out that in 1996, when Congress decided that the way to prevent illegal immigrants from claiming the EITC would be to require claimants to provide a Social Security number, they did not foresee executive amnesty.

“What Congress didn’t know at the time was that an unknown–at an unknown future date, a President, with the stroke of a pen, would essentially grant millions of undocumented workers amnesty,” Grassley said. “Under the President’s action, those previously working illegally in the United States will be eligible for work authorization and a Social Security number.”

He went on to argue that his proposal would simply extend Congress’ intent to prohibit benefits from going to illegal work. Those granted amnesty could still claim the EITC for future legal work.

“This bill should be a no-brainer for any of my colleagues that agree we should not be rewarding individuals for breaking our immigration laws and our employment laws,” he said.