Additional Child Tax Credit: a senseless tax loophole

Staten Island Borough President Jim Molinaro has come out swinging against a little-known tax loophole that, according to estimates, costs American taxpayers $4.2 billion per year.

I’m sure you’re aware of the Additional Child Tax Credit that allows the guardian of dependents to receive a tax credit of up to $1,000 per child. However, Molinaro and other pols are pointing out glaring discrepancies with the tax credit, particularly that it is being widely abused by illegal immigrants.

The IRS website clearly states that the child receiving the tax credit “must be a U.S. citizen, U.S. national, or U.S. resident alien,” but this provision is not being enforced. An investigation by the Treasury inspector general found that illegal immigrants were taking advantage of the tax loophole by filing taxes not with Social Security numbers, but with Individual Taxpayer Identification numbers, which are far easier to acquire.

According to Molinaro’s estimates, 2 million illegal immigrants file for the Additional Child Tax Credit, at a cost to taxpayers of approximately $4.2 billion per year. He claims that the IRS is fully aware of the scam but is forced to turn a blind eye. “It doesn’t even have to be your own kid,” Molinaro said. “The illegal workers are routinely claiming nieces and nephews who live in Mexico. This is absolutely outrageous, and what’s worse is the IRS is aware of what’s going on, and claims they are powerless to stop it without congressional intervention.”

Molinaro is right. I was appalled to hear about this injustice at the expense of the taxpayer. Some examples of abuse show illegal immigrants claiming up to 12 children to receive the tax credit and, upon further examination, it appeared that these “children” included nieces and nephews who didn’t even live in the country. How this is allowed to happen is beyond my wildest imagination.

In response to the Treasury inspector general’s investigation, the IRS said that it is up to Congress to change the current tax laws.