Michelle Malkin / June 1, 2016

The $16 Billion Tax-Credit Black Hole

President Obama and GOP House Speaker Paul Ryan want to expand it. Tax preparation companies and illegal immigrants are cashing in on it. Fraudsters have found bottomless ways to exploit it. The earned income tax credit, a bipartisan-supported “anti-poverty” benefit, is robbing honest, law-abiding Americans blind. Originally intended to help low- to moderate-income working individuals and couples with children, the refundable tax credit has ballooned into a massive welfare entitlement for politically correct constituents who pay no income taxes — yet are still eligible for payouts.

President Obama and GOP House Speaker Paul Ryan want to expand it. Tax preparation companies and illegal immigrants are cashing in on it. Fraudsters have found bottomless ways to exploit it.

The earned income tax credit, a bipartisan-supported “anti-poverty” benefit, is robbing honest, law-abiding Americans blind. Originally intended to help low- to moderate-income working individuals and couples with children, the refundable tax credit has ballooned into a massive welfare entitlement for politically correct constituents who pay no income taxes — yet are still eligible for payouts.

According to a new report from the Treasury Department’s Inspector General for Tax Administration, a whopping 23.8 percent of EITC payments, worth an estimated $15.6 billion, were issued improperly in fiscal year 2015 alone. The Office of Management and Budget singled out the $69 billion federal cash transfer program as “high risk”. (It’s the only IRS program that carries the designation).

Shady accountants help clients falsify income in order to claim the credits, then charge exorbitant fees for the “service.” Self-employed filers also inflate their income with little chance of getting caught. Everyone’s red flags are flapping, but the hole just keeps getting bigger. The Internal Revenue Service can identify “erroneous” claims, but it doesn’t currently have any authority to do anything to rectify them.

Instead of stopping the rip-offs, the Obama administration has fueled an entire industry of illegal immigration vultures gaming the already fraud-plagued system.

In addition to blanket deportation waivers and work permits, Obama’s executive amnesty orders extended EITC eligibility (retroactive to the last three tax years) to the so-called Dreamers and their parents. It’s a proven recipe for bamboozlement. Illegal immigrants using individual taxpayer identification numbers have scammed another refundable tax credit program, the Additional Child Tax Credit, to the tune of $4.2 billion a year, according to tax watchdogs. Average ACTC monthly payments to eligible families are about $1,800. Average EITC monthly payments to eligible families hover around $3,000.

Just this month, an illegal immigrant con artist from Honduras pleaded guilty to conspiracy to defraud the U.S., conspiracy to commit money laundering and illegal re-entry by a previously deported immigrant after the feds uncovered his $11 million EITC racket. His main partner, another Honduran illegal immigrant, is on the run.

The duo was assisted by several naturalized citizens in Tennessee who obtained phony Mexican, Honduran and Guatemalan IDs, prepared fake tax returns, and operated check-cashing businesses for Hispanic customers collecting hefty tax refunds. According to federal indictment documents, the conspiracy raked in 2,400 bogus refund checks between January 2012 and November 2014 totaling $10.8 million.

A hand up for the working poor has morphed into a cash cow for grifters from around the world. Economists add that the well-intentioned program has paved a path to reduced work incentives, lower wages and distorted family decisions (married couples are penalized).

When the enormous costs of such tax code social engineering outweigh the benefits in an era of unfettered open borders, it’s time to pull the plug.

COPYRIGHT 2016 CREATORS.COM

Start a conversation using these share links:

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2022 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.