Filtering The Facts - A government audit finds suspected illegal immigrants received $4.2 billion in federal tax credits they may not be entitled to receive, and Aguilera writes a story of Republicans versus illegal immigrants. The news media ignored September 2011 audit findings. Aguilera, a propagandist for the left, writes her story to leave the impression illegal aliens are entitled to receive the credits when the law is unclear about it. Instead of explaining Republicans responded to auditor findings, she quotes a Republican who explain it to her, but did not reference the audit.
Aguilera writes “Hundreds of thousands of undocumented immigrants have received IRS refunds based on the federal tax credit, and now congressional Republicans are trying to stop the practice.”
Aguilera uses the Junk Journalism practice of giving partial facts regarding Individual Taxpayer Identification Number (ITIN). Illegal workers receive their ITIN number from the IRS in order for them to file tax returns. Illegal workers cannot use the number to get a job, but it does allow them to file tax returns that reflect low incomes and allow them to collect cash payments even though they have not paid taxes. Unfortunately, the audit indicate that the even U.S. citizens willing to commit fraud could obtain an ITIN with a fake ID and obtain credits.
A writer practicing Just Journalism would have reported the story this way:
“Republicans are attempting to close a loophole that allowed the IRS to deliver $4.2 billion in the child tax credits to suspected undocumented workers.
While illegal workers were barred in 1996 from receiving most federal tax credits, when Congress approved the Child Tax Credit and Additional Child Tax Credit (ACTC) in 1997, the law did not specifically bar illegal immigrants from benefiting from the new credit. While the 1996 prohibition is still in place, the IRS claims it lacks the authority to stop the payments. Republicans responding to the audit and request for clarification are moving to close the loophole. The credit can be extremely lucrative for some suspected illegal immigrants. In 2010, 9,000 claimants requested $10,000 or more in credits.”
Source of Story Not Identified - Based on the content of Aguilera’s story, most of the information was provided by the advocacy group First Focus Campaign For Children. The group’s Ed Watz issued a press release on Feb. 2 entitled “Leaders Unite Opposing Plan to Tax Poor Children”. Aguilera uses information from the release and uses little information from an audit of the program. In a followup story, Aguilera repeats the group’s claim that the majority of the tax credits paid to ITIN users help fund the U.S. citizen children of illegal immigrants. She provides no source for that claim. However, Watz made the claim in his press release that 4 out of 5 of the children benefiting from the credits issued to ITIN users were legal citizens. JJChronicles asked Watz to provide the source of that information. Watz said while it was a “good question”, he did not know the source of that information. He offered to research and provide the source once he learned it. As of this date, he has not provided the information to JJChronicles.com.
Aguilera claims “In the simplest terms, the question is who should get the tax relief – all of the nations working poor or only legal residents.” Aguilera assumes that those filing with an ITIN’s are working. It is not possible for the reporter to know this as an ITIN is not used to seek employment or hold a job. The illegal immigrants may or may not be working. In addition, since they need a Social Security number to hold job they are either (1) working with a stolen number or (ii) a fake number.
Previous audits of the ITIN program found some illegal workers file a tax return using the stolen Social Security number and file again using the ITIN number. The audits show it is possible for a working illegal immigrant to claim little income on the ITIN return and qualify for say $10,000 worth of credits. If the illegal immigrant is working using a stolen Social Security number, the legal owner of that number would be liable for those taxes until that owner realized their number was being used. Previous audits found the IRS does not notify U.S. citizens when their Social Security number is being used by another person. Aguilera reports that the average refund to illegal immigrants is $1,800 but does not think it is newsworthy that 9,000 ITIN filers claimed $10,000.refunds.
Apples and Oranges - Aguilera writes ITIN filers account for “$7 to $9 billion in taxes paid annually to Social Security and Medicare.” This is the red herring argrument often used by pro-amnesty groups. What illegal immigrants pay into Social Security and Medicare is not relevant to an income tax discussion. Aguilera doesn’t do the math. While the government is taking in money for Social Security and Medicare, it is giving more than half of it back in child care tax credits.
IMMIGRATION - Junk journalist Aguilera says “Immigration should not be at play here, critic’s of the latest measure said.” This debate has nothing to do with immigration. It has everything to do with ILEGAL immigration.
Aguilera Uses Source To Mislead Readers - The source Bruce Lesly, President of First Focus, is quoted by Aguilera as saying “these are families that are paying taxes and that is why they get a credit.” Aguilera’s inclusion of this quote is further indication that she did not read the government audit of the program. The fact is the credit can exceed any tax liability. Aguilera leaves this information out and doesn’t question Lesly about his claims. “The ACTC is always the refundable portion of the CTC, which means an individual claiming the ACTC receives a refund even if no income tax was withheld or paid. As with all refundable credits, the risk of fraud for these types of claims is significant,” the audit stated.
More Misrepresentation - Aguilera quotes another source who claimed that illegal immigrants who file tax returns using the ITIN are “paying taxes” and are trying to be the most “lawful.” It did not occur to Aguilera to question the source, a La Raza spokesperson, regarding the clear indications of fraud in the program. Aguilera allows her story to become a Republican against Hispanics propaganda piece rather than a story about a poorly designed and run program that may be costing tax money rather than gathering it. The ITIN program was designed to collect tax revenue not distribute it. The audit found another odd difference between those filing tax returns using a Social Security number and ITIN filers. While 14 percent of the Social Security number filers claimed the ACTC, 72 percent of the ITIN returns made the claim for credit.
1. How does the IRS verify the claimed income?
2. How does the IRS verify the existence of children who do not have Social security numbers. Is it possible for an ITIN filer to claim 5 children when they have none? Could this explain the 72 percent claim rate among ITIN users versus the 14 percent of Social Security number filers?
3. How does the IRS stop the same individuals using different addresses and fake names from filing multiple ITIN tax returns claiming credits?
4. After numerous audits of the program over a decade, why does fraud continue to be a problem with the ITIN program?