The Additional Child Care Credit scam, wherein the IRS allows someone to get a tax credit for children claimed to be residing part of the year at a residence (often whether the children actually live there or not), will continue to be enjoyed by millions of illegal immigrants.
When a local tax preparer in Indianapolis decided to blow the whistle on a scam being used to funnel billions of American taxpayer dollars to illegal immigrants through an IRS tax loophole, the resulting story was met with anger and outrage.
Channel 13 WHTR’s reporter, Bob Segall, wrote a two-part expose of the scam and ran it on television on April 26, explaining how it works. The Internal Revenue Code provides for an “additional child tax credit” of up to $1,000 to help working families who have children living at home. It requires that each child live at home for at least six months out of the year. But several years ago illegal immigrants discovered a loophole that allows them to claim as many children as they want — including nieces and nephews — even if they have never stepped foot on American soil.
Illegals must pay taxes but they can’t obtain a Social Security number. And so to remedy the situation, President Bill Clinton signed into law a solution: Illegals can receive a nine-digit individual taxpayer number — an ITIN — which allows their employers to withhold payroll taxes. When it was discovered that the IRS was lax in determining who actually had children living at home, or not, the scam took off. ITIN claims for the credit totaled $161 million in 2001 but have ballooned to $4.2 billion in 2011.
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