Mail addressed to the Department of the Treasury, Internal Revenue Service, is seen at the James A. Farley Post Office in New York, April 15, 2010.
| AP Photo
The report was released by the Treasury Inspector General for Tax Administration, | AP Photo Close
The report, released Thursday by the Treasury Inspector General for Tax Administration, showed that the IRS allowed people unauthorized to work in the United States to collect billions of dollars in refundable tax credits in 2010, The Washington Post reported.
Under current law, individuals not permitted to work in the U.S. do not receive most federal public benefits — but an increasing number are filing tax returns claiming the Additional Child Tax Credit, which is set up for working families. The IRS says the law as presently written is vague and does not permit them to disallow the claims.
“Clarification is needed on this issue,” TIGTA J. Russell George said in a press release. “The Internal Revenue Service should work with the Department of the Treasury to clarify whether this credit, which is based on earned income, should be paid to those who are not authorized to work in the United States.”
The credit gives those who claim it a reduction in what they owe in taxes — and often results in a refund from the government. According to the audit, 72 percent of returns filed by undocumented workers claimed the additional child tax credit in 2010.
Before 2001, filers had to have three or more children to qualify for the credit. Since then, claims have shot up — in 2005, the audit showed, 796,000 undocumented filers claimed the tax credit for a total of $924 million.
The American Recovery and Reinvestment Act of 2009 also made it easier to qualify for the refund, according to the report.
