Democrats ducked a debate last week about cutting off tax breaks to illegal immigrants, but Republicans vowed to keep raising the issue, saying that having the IRS pay out tax credits to those who shouldn't be in the country in the first place is a form of fraud.
For the GOP, which has tried repeatedly to require taxpayers collecting the Additional Child Tax Credit to prove they are in the country legally, it's a good-government reform — and one that's backed by the IRS' own internal auditor.
But for Democrats, the move to cut off the tax break amounts to a war on the oftentimes legal children of illegal immigrant parents.
"This is similar to 'Groundhog Day' because this is a picture we have already seen," Majority Leader Harry Reid, Nevada Democrat, said Thursday on the Senate floor. "We are not going to hurt American children, and that is what it does. We have been through this. This is something we have tried to use in the past to pay for things that are very unfair to American children."
Senate Republicans were trying to set up a choice for Democrats last week, making them choose between keeping the illegal immigrant tax break and forgoing additional unemployment benefits for legal U.S. workers, or else canceling the break, and using that money to pay for an extension of the benefits.
But Mr. Reid refused to allow the GOP to offer its amendment, which saved his fellow Democrats from having to take a stand.
"I would think all of us would want to do that — to preserve child tax credits for those who are truly eligible. For those who are not eligible, obviously, they shouldn't have access to it. It seems like a sensible amendment to me," said Sen. Rob Portman, Ohio Republican, a co-sponsor of the proposal written by Sen. Kelly Ayotte, New Hampshire Republican.
People who are not legally authorized to work in the United States claimed more than $4 billion from the additional child tax credit in processing year 2010, according to a 2011 inspector general report.
The IRS collects taxes on all revenue earned within the borders of the United States, regardless of whether it was earned by legal workers. Illegal immigrants are provided a nine-digit individual tax identification number (ITIN) that can be used to file taxes and collect the additional child credit, which is a maximum of $1,000 per child.
The inspector general urged the IRS to require a Social Security number, which would weed out those using an ITIN. But the IRS disagreed, saying that under its reading of the law, illegal immigrants are allowed to collect this tax break.
While it's clear from the IG report that fraud is taking place, Wendy Cervantes, the vice president of immigration and child rights at First Focus, said 82 percent of the children whose parent files with an individual taxpayer identification number are citizens.
"All we know of are anecdotal instances of fraud, but we know the vast majority of children benefiting from this who have parents filing with ITIN are citizens," she said. "We know for a fact there are millions of children who do exist who will be harmed if there's changes in child tax credit eligibility."
She added that requiring a Social Security number to claim the credit will do little to eliminate fraud since people with Social Security numbers can still fabricate children or claim children living in other countries.
Alex Nowrasteh, an immigration policy analyst with the Cato Institute, said he believes there could be a middle ground that prevents families who fake children or those who don't live in the U.S. from receiving the benefits, but still allows legal citizens with illegal parents to benefit from the payment.
"Anything that makes it more difficult to get the child tax credit and to prove they're American citizens is probably a good thing, but if it's limited to only U.S. citizen children of illegal immigrants who can get it, that's still a step in the right direction," he said.
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