[Rushtalk] Federal Fraud...........

John A. Quayle blueoval57 at verizon.net
Tue Jun 18 16:16:09 MDT 2013



<http://spectator.org/archives/2013/06/18/the-irs-immigration-fraud-scan>The 
IRS Immigration Fraud Scandal

By <http://spectator.org/people/jeffrey-lord>Jeffrey Lord on 6.18.13 @ 6:09AM

Rubio, Ryan losing credibility over amnesty as fraud issue returns.

Marco Rubio.

Paul Ryan.

The IRS.

Illegal immigration.

And fraud to the tune of billions..

Now there’s a combustible mix.

Let’s start with the IRS, illegal immigration and 
fraud. We’ll come back in a minute to Senator Rubio and Congressman Ryan.

For those who came in late, a year before the IRS 
scandals burst onto the scene in early May of 
2013, an alert investigative reporter for 
WTHR-Indianapolis (Channel 13), Bob Segall by 
name, produced a stunning piece of journalism. 
Segall’s video report is found 
<http://www.wthr.com/story/17798210/tax-loophole-costs-billions>here 
and we will quote from his story for the basics. 
The tale begins when an Indiana tax preparer, who 
requests anonymity, comes to Segall to alert the 
investigative reporter to a major league tax 
fraud. The bold print for emphasis is mine.

“We’re talking about a multi-billion dollar fraud 
scheme here that’s taking place and no one is 
talking about it,” he (the tax preparer) said.
The scheme involves illegal immigrants ­ illegal 
immigrants who are filing 
<http://spectator.org/archives/2013/06/18/the-irs-immigration-fraud-scan/print#>tax 
returns.
How it works
The Internal Revenue Service says everyone who is 
employed in the United States ­ even those who 
are working here illegally ­ must report income 
and pay taxes. Of course, undocumented workers 
are not supposed to have a social security 
number. So for them to pay taxes, the IRS created 
what’s called an ITIN, an individual 
<http://spectator.org/archives/2013/06/18/the-irs-immigration-fraud-scan/print#>taxpayer 
identification number. A 9-digit ITIN number 
issued by the IRS provides both resident and 
nonresident aliens with a unique identification 
number that allows them to 
<http://spectator.org/archives/2013/06/18/the-irs-immigration-fraud-scan/print#>file 
tax returns.
While that may have seemed like a good idea, it’s now backfiring in a big way.
Each spring, at tax preparation offices all 
across the nation, many illegal immigrants are 
now eagerly filing tax returns to take advantage 
of a tax loophole, using their ITIN numbers to get huge refunds from the IRS.
The loophole is called the Additional Child Tax 
Credit. It’s a fully-refundable credit of up to 
$1000 per child, and it’s meant to help working 
families who have children living at home.
But 13 Investigates has found many undocumented 
workers are claiming the tax credit for kids who 
live in Mexico ­ lots of kids in Mexico.
“We’ve seen sometimes 10 or 12 dependents, most 
times nieces and nephews, on these tax forms,” 
the whistleblower told Eyewitness News. “The more 
you put on there, the more you get back.”
The whistleblower has thousands of examples, and 
he brought some of them to 13 Investigates. While 
identifying information such as names and 
addresses on the tax returns was redacted, it was 
still clear that the tax filers had received 
large tax refunds after claiming additional child 
tax credits for many dependents.
“Here’s a return right here: we’ve got a $10,300 
refund for nine nieces and nephews,” he said, 
pointing to the words “niece” and “nephew” listed 
on the tax forms nine separate times.
“We’re getting an $11,000 refund on this tax 
return. There’s seven nieces and nephews,” he 
said, pointing to another set of documents. “I 
can bring out stacks and stacks. It’s just so easy it’s ridiculous.”

20 kids = $30,000
WTHR spoke to several undocumented workers who confirmed it is easy.
They all agreed to talk with WTHR investigative 
reporter Bob Segall and a translator as long as 
WTHR agreed not to reveal their identity.
One of the workers, who was interviewed at his 
home in southern Indiana, admitted his address 
was used this year to file tax returns by four 
other undocumented workers who don’t even live 
there. Those four workers claimed 20 children 
live inside the one residence and, as a result, 
the IRS sent the illegal immigrants tax refunds totaling $29,608.
13 Investigates saw only one little girl who 
lives at that address (a small mobile home). We 
wondered about the 20 kids claimed as tax deductions?
“They don’t live here,” said the undocumented 
worker. “The other kids are in their country of origin, which is Mexico.”
He later explained none of the 20 children have 
ever visited the United States ­ let alone lived here.
So why should undocumented workers receive tax 
credits for children living in a foreign country, 
which is a violation of IRS tax rules?
“If the opportunity is there and they can give it 
to me, why not take advantage of it?” the worker said.
Other undocumented workers in Indiana told 13 
Investigates the same thing. Their families are 
collecting tax refunds for children who do not 
live in this country. Several of the workers told 
WTHR they were told it was legal for them to 
claim the tax credit for a child who does not live in the United States.

Stop here.

So what Segall uncovered is massive tax fraud by 
illegal immigrants through the use of the Additional Child Tax Credit.

Segall then goes to a man who, barely a year 
later, would become a familiar face to Americans. 
The Inspector General of the Treasury Department, 
Russell George. George, on camera, says this of 
his repeated warnings to the IRS about this problem:

“The magnitude of the problem has grown 
exponentially,” said Russell George, the United 
States Department of Treasury’s Inspector General 
for Tax Administration (TIGTA).
And he says the IRS has known about the problem for years.
George has repeatedly warned the IRS that 
additional child tax credits are being abused by 
undocumented workers. In 2009, his office 
released an audit report that showed ITIN tax 
filers received about $1 billion in additional 
child tax credits. Last year, the inspector 
general released a new report showing the problem 
now costs American taxpayers more than $4.2 billion.
“Keep in mind, we’re talking $4 billion per 
year,” he said. “It’s very troubling.”
What George finds even more troubling is the IRS 
has not taken action despite multiple warnings from the inspector general.
“Millions of people are seeking this tax credit 
who, we believe, are not entitled to it,” said 
the inspector general. “We have made 
recommendations to [IRS] as to how they could 
address this, and they have not taken sufficient 
action in our view to solve the problem.”

Stop again.

After noting that filings for the ACTC have 
soared since 2001, the cost skyrocketing from 
$161 million in 2001 to $4.2 billion ­ say again, 
billion ­ in 2010, Segall goes to the IRS for comment.

What he gets is this:

The law has been clear for over a decade that 
eligibility for these credits does not depend on 
work authorization status or the type of taxpayer 
identification number used. Any suggestion that 
the IRS shouldn’t be paying out these credits 
under current law to ITIN holders is simply 
incorrect. The IRS administers the law 
impartially and applies it as it is written.

That was all. Repeated requests for on camera 
interviews with IRS officials were denied. Period.

Inspector General George, however, took immediate 
issue with that statement issued by the IRS. Reports Segall:

George disagrees with that position and believes 
the IRS should be doing more to prevent 
undocumented workers from getting billions in U.S. tax dollars.
“The IRS is not doing something as simple as 
requesting sufficient documentation from people 
seeking this credit,” he said. “Once the money 
goes out the door, it’s nearly impossible for the IRS to get it back.’”

End of story.

What does this one snapshot of massive tax fraud 
captured so vividly by reporter Segall have to do 
with Senator Rubio and Congressman Ryan?

Everything.

Senator Rubio is in fact aware of the problem and 
has introduced legislation to stop the fraud. For 
this he has been attacked by Hispanic left-wing 
activists as reported 
<http://miamiherald.typepad.com/nakedpolitics/2012/05/immigration-reform-groups-decry-marco-rubios-tax-fraud-bill.html>here 
in the Miami Herald in May of 2012. So too is 
Congressman Ryan aware of the problem and, in 
this May 2012 story from WTHR Bob Segall reports:

“This is where our taxpayer money is going, to 
the [additional] child tax credit,” said Rep. 
Paul Ryan (R-WI) Thursday morning during 
Congressional debate. “One investigation in 
Indiana said illegal immigrants in Indiana are 
getting $29,608 for 20 children they claimed for 
the tax credit who live in Mexico and have never 
visited the United States before!”
Rep. Ryan, chairman of the House Budget 
Committee, wants tax credits for illegal 
immigrants stopped, and so do many other 
lawmakers who saw WTHR’s investigation. They 
debated it Thursday morning on the floor of the 
House after being bombarded by phone calls and 
e-mails from constituents who watched the Eyewitness News report online.

Now.

Here’s the problem ­ and it’s potentially a very 
big problem for Rubio and Ryan.

The two men, Rubio in the Senate as a member of 
the so-called Gang of Eight, and Ryan in the 
House, have aggressively gone out front on the issue of immigration.

Ryan has even declared that “I will debate 
anybody who tries to suggest that these ideas 
that are moving through Congress are amnesty. 
They’re not. Amnesty is wiping the slate clean 
and not paying any penalty for having done something wrong.”

Over at National Review Mark Krikorian calls the 
Florida Senator’s Gang of Eight bill “Rubio’s 
Amnesty” in this 
<https://www.nationalreview.com/nrd/articles/347189/rubio-amnesty>piece 
and says this of the Rubio Senate bill:

The result of all this is S.744, a sprawling, 
844-page measure legalizes most of the illegal 
population (plus many who were deported and are 
currently living abroad), promises tougher 
enforcement in the future, and hugely increases 
all forms of legal immigration, low- and 
high-skilled, temporary and permanent
..

Then we got to see the actual text of the 
legislation. Rubio’s promised provisions are 
absent. Regarding back taxes, for instance, the 
bill requires only that applicants “satisfy any 
applicable federal tax liability” that has 
previously been “assessed” by the IRS. But a tax 
is “assessed” only after a tax return has been 
submitted or after the IRS has conducted an 
audit. Since neither of those things happens with 
illegal immigrants working off the books, there 
aren’t any back taxes to be paid.
The fine for legalization is small ­ just $500 up 
front and $500 paid in installments, in return 
for lifetime legal access to the U.S. labor 
market. And while $500 can be a lot for an 
illegal immigrant, in a certain sense it isn’t a 
fine, since the money would go into a slush fund 
for DHS to dole out to groups such as La Raza, 
which are in turn to provide services for the 
very amnesty beneficiaries who paid the fines. 
(Conservative writer John Fonte has called this 
the Alinsky Fund.) Even such a modest penalty is 
absent for crooked employers. They get amnesty 
for free ­ amnesty from prosecution for knowing 
employment of illegal aliens, non-payment of 
wages, non-payment of payroll taxes, and facilitation of identity theft.
As for learning English, the language requirement 
applies only to already-amnestied immigrants 
seeking the upgrade to full green card, and even 
then, requires only enrollment in a class, not 
demonstration of actual proficiency (which is 
what is required for citizenship).
Moreover, the bill provides for a huge increase 
in legal immigration ­ and not just increased 
numbers but increased complexity, in a system 
already excessively complex. It has special 
provisions for guest workers, farm laborers, and 
foreign technology workers, doctors, and nurses, 
as well as retirees, entrepreneurs, and foreign 
students graduating with technical degrees. The 
Schumer-Rubio bill simply seeks to placate every 
interest group at the table by handing out more 
visas. Numbers USA has estimated the number of 
green cards that would be issued during the first 
decade of the bill’s operation at 33 million. 
About one-third of those would be illegal aliens 
receiving amnesty, so new immigration would go 
from about 1 million per year to 2 million.

Finally, securing the Mexican border. The 
benchmark given in the bill is called “effective 
control” and means surveillance of 100 percent of 
the border and apprehension of 90 percent of 
attempted infiltrators. This is absurdity many times over.

So.

What does the reality of the Rubio bill, and the 
aggressive defense of Ryan have to do with that 
year-old investigative piece out of Indiana?

Everything. And while we like both Senator Rubio 
and Congressman Ryan, their actions raise 
troubling red flags both on the immigration bill 
and their respective potential runs for president in 2016.

Why?

At the core of the Indiana story about tax fraud 
by illegal immigrants is yet again the 
realization that Big Government has gone off the 
rails. It is so far from the original vision of 
the Founders as expressed in the Constitution as to be hell-and-gone.

What the Indiana story of massive IRS fraud by 
illegal immigrants vividly illustrates is yet 
another story of corruption and government gone 
wild. It is the same story as the IRS ­ Tea Party 
scandal. It is the same story as the NSA-Edward 
Snowden issue. It is the same story as Benghazi. 
It is the same story as State Department 
cover-ups of tales of State Department employees 
involvement with prostitutes, sexual assaults, and illegal drugs.

Time and time and time again this always comes 
back to the incompetence and/or corruption of a 
government that is seen as being run by arrogant 
mandarins of the ruling class elite.

Knowing all of this, both Rubio and Ryan are out 
there actively selling the idea that this time 
government will get it right. That this time 
their solutions to an out-of-control illegal 
immigration problem­ which relies 100% on a Big 
Government that has failed over and over and over 
again and can’t even manage to control the border 
­ are going to work. Really. Honest.

In truth? This is nonsense on stilts.

Both men are in the process of developing the 
immigration reform issue into a serious 
credibility problem with their own conservative base.

Nor is the immigration issue helped when Senator 
Lindsey Graham 
<http://www.mediaite.com/tv/sen-lindsey-graham-on-nbc-gop-in-demographic-death-spiral-must-pass-immigration-reform>says 
the whole point of the exercise is to “get back 
in the good graces” of Hispanics. (Note: this is 
the same Senator Graham who went after 
Pennsylvania conservatives ­ Pat Toomey in 
particular ­ for allegedly driving then-GOP 
Senator Arlen Specter from the party. Graham’s 
candidate: liberal ex-Governor Tom Ridge. Suffice 
to say, Toomey won. Graham’s notion that a 
conservative was a loser in Pennsylvania was flat dead wrong.)

When Congressman Ryan hotly declares that the 
“bipartisan” immigration bill is not amnesty ­ 
and the bill is revealed to be more of the same 
of the 1986 Reagan immigration bill ­ which 
Reagan himself considered to be amnesty ­ his credibility plunges.

The other day in the Wall Street Journal, Karl 
Rove tried to pass off a version of this same 
idea and was instantly challenged in the WSJ by 
former Reagan Attorney General Edwin Meese III. 
<http://online.wsj.com/article/SB10001424127887324188604578541393405898474.html?mod=wsj_share_tweet>Wrote 
Meese, bold print for emphasis mine:

Karl Rove’s recollection of the 1986 Immigration 
Reform and Control Act (“Immigration Reform and 
the Hispanic Vote,” op-ed, June 6) is, shall we 
say, highly selective. That law, he writes, 
“essentially told those here illegally that if 
they had arrived in the U.S. prior to 1982 and 
wanted to become citizens, simply raise your 
right hand.” He asserts that the Gang of Eight 
bill is different because it “has plenty of 
penalties and hurdles for those here illegally who seek citizenship.”
Well, I was there in ‘86. I read that bill 
carefully. (We did that back then.) And I can 
tell you that Mr. Rove’s blithe description of the bill is way off the mark.
The 1986 act didn’t turn illegal immigrants into 
citizens on the spot. It granted temporary 
resident status only to those who could prove 
they had resided continuously in America for five 
years. After 18 months, their status could be 
upgraded to permanent residency, and only after 
another five years could they become U.S. citizens.

But advancement to citizenship was not automatic. 
Immigrants had to satisfy various requirements 
along the way. They had to pay application fees, 
learn to speak English, understand American 
civics, pass a medical exam and register for 
military selective service. Those with 
convictions for a felony or three misdemeanors were ineligible.
Sound familiar? It’s pretty much the same 
“penalties and hurdles” set forth by the Gang of 
Eight. Today they call it a “roadmap to 
citizenship.” Ronald Reagan called it “amnesty.”
The ‘86 reform bill also had supposedly 
“rigorous” border security and immigration law 
enforcement provisions. So how did that pan out? 
On the day Reagan signed “comprehensive” reform 
into law, only one thing changed: Millions of 
unlawful immigrants gained “legal” status. The 
promised crackdowns on security and enforcement 
never happened. Only amnesty prevailed.
Since the ‘86 amnesty, the number of illegal 
immigrants has quadrupled. That should teach 
Congress a very important lesson: Amnesty “bends” 
the rule of law. And bending the rule of law to 
reach a “comprehensive” deal winds up provoking 
wholesale breaking of the law. Ultimately, it 
encourages millions more to risk entering the 
country illegally in the hope that one day they, too, might receive amnesty.

In other words, what Meese is saying here is that 
what he sees ahead is a government that refuses 
to learn from experience when dealing with 
immigration ­ and learning from experience is basic to conservatism.

Increasingly and dangerously Rubio and Ryan are 
being seen as sons of the Republican 
Establishment who, if they ever were elected 
president, would spend their time in Bush-like 
tinkerings at the margin of Big Government when 
not expanding it outright. Their inability to 
learn from the Reagan immigration experience is a 
startling admission that perhaps neither man is 
as conservative as once thought.

Are they good men? Yes. Talented and conservative 
in many respects. But alas, what is on display 
right this minute from both is the same old 
Republican Establishment flirtation with Big Government.

Trust the government, say Rubio and Ryan. Really. 
This time it will work. Honest.

The problem?

After an endless series of stories about 
incompetence or outright corruption in one 
government scandal after another, not to mention 
the massive failure of the 1986 Reagan 
immigration law, there are conservatives aplenty 
who listen to Marco Rubio and Paul Ryan and 
simply don’t believe a word they say on immigration.

Not good.

Photo: UPI



About the Author

Jeffrey Lord is a former Reagan White House 
political director and author. He writes from 
Pennsylvania at <mailto:jlpa1 at aol.com>jlpa1 at aol.com.
http://spectator.org/archives/2013/06/18/the-irs-immigration-fraud-scan  
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