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Abuse Rampant in Fraudulent Tax Returns: (Illegals Fraudulently Collecting EITC)
D.C. Examiner ^ | 04/09/09

Posted on 04/17/2009 11:46:05 AM PDT by freespirited

Abuse is rampant in the collection of fraudulent income tax refunds from the IRS, especially by illegal immigrants -- according to a new report to be released by the Social Contract Press on April 14.

The 51-page report, The Earned Income Tax Credit and Illegal Immigration: A Study in Fraud, Abuse, and Liberal Activism, by financial analyst and economist Edwin Rubenstein, will be released at a News Conference at 1 p.m. on Tuesday, April 14, 2009 at the National Press Club (529 14th St., NW, 13th floor) in Washington, D.C.

"The Earned Income Tax Credit (EITC) is the largest anti-poverty program in the United States -- and the most illegal-immigrant friendly," explains Edwin Rubenstein, author of the new report. "In 2007, more than 23 million households received more than $47 billion in the EITC payments -- and between one-quarter to one-third of all EITC claims were 'improperly paid' according to the General Accounting Office."

According to the report, much of the so-called "tax relief" goes to people who never paid a cent in taxes, and may have already defrauded the government of huge sums each year. "EITC scams are common, well-organized, and massive," Rubenstein writes in the report. EITC ranks second out of 57 government programs in fraudulent payments. Only Medicare reported a larger dollar amount.

Public policy expert, James R. Edwards, Jr., said "EITC has become yet another means of depriving hard-working Americans of their own resources. It robs some to give to others. This is exactly the kind of so-called 'tax relief' Obama talked about during the campaign and in his sales job for his economic stimulus bill. Obama is redistributing wealth via the tax code and misleading the public by calling it tax cuts. Rather it's welfare by other means," Mr. Edwards said.

The EITC is the most accessible of the major entitlement programs and used by more people than food stamps and welfare (TANF)* combined.

The complete report, The Earned Income Tax Credit and Illegal Immigration: A Study in Fraud, Abuse, and Liberal Activism, will be available at the Social Contract Press website, www.thesocialcontract.com.


TOPICS: News/Current Events
KEYWORDS: eitc; fraud; illegals; taxfraud
Geithner will say these are just honest mistakes.
1 posted on 04/17/2009 11:46:06 AM PDT by freespirited
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To: freespirited

The SOP solution: amnesty.

/s off.


2 posted on 04/17/2009 11:48:33 AM PDT by Kimberly GG (Flying my flag upside down until our constitution is respected/our nation is restored.)
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To: freespirited

If they can’t speak english, I doubt they can read it. Who is aiding these criminals?


3 posted on 04/17/2009 11:53:06 AM PDT by devistate one four (CW II on the way! Stand by. TET68)
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To: freespirited

That is because Citizens are not “guests” like these honest and upstanding “guest-workers” are. Citizens must be kept in line, quite forcefully otherwise they might start to doubt the magnanimosity and benevolence of the government.

[/sarc][/cynic]


4 posted on 04/17/2009 11:53:13 AM PDT by OneWingedShark (Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
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To: freespirited

Abuse is rampant in the collection of fraudulent income tax refunds from the IRS, especially by illegal immigrants ...

I’m shocked....not!


5 posted on 04/17/2009 11:54:29 AM PDT by AngelesCrestHighway
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To: freespirited
Abuse Rampant in Fraudulent Tax Returns

After seeing Geithner get confirmed as head IRS dude should they be surprised at all? The federal government has just turned the collection of taxes into a giant Easter Egg Hunt with one simple message.

CHEAT ... take what you can.

6 posted on 04/17/2009 11:58:14 AM PDT by Centurion2000 (01-20-2009 : The end of the PAX AMERICANA.)
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To: devistate one four

Be careful in complaining about illegal activity by illegal aliens...DHS might come after you.


7 posted on 04/17/2009 11:59:01 AM PDT by Boiling Pots (The Politicians think we're all stupid, and they're largely correct.)
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To: devistate one four
If they can’t speak english, I doubt they can read it. Who is aiding these criminals?

Heck, a goodly fraction are illiterate in two languages...

8 posted on 04/17/2009 12:03:31 PM PDT by null and void (We are now in day 87 of our national holiday from reality.)
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To: freespirited

This fraud is perpetrated by ACORN and illegals getting special border protection from foreign government and home domestic proto-terror states protected by a class of lawyers.

This is serious line crossing because it means that we can see a clear border foreign aid parallel violations by illegals and ACORN folkes getting together, much like islamo sleeper cells. It’s a clear case of custodial rearrangement and civil war.


9 posted on 04/17/2009 12:05:22 PM PDT by JudgemAll (control freaks, their world & their problem with my gun and my protecting my private party)
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To: freespirited

Let me guess... they all used TurboTax?


10 posted on 04/17/2009 12:06:48 PM PDT by nodumbblonde (Produce, and feed us in exchange for our not destroying your production.)
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To: freespirited
This has been going on for years.

In fact, the most audited returns are those with Schedule C (Self Employment Income) and claim the Earned Income Tax Credit.

It's like shooting fish in a barrel for an auditor: disallow a couple of expenses, and voila!, away goes much of the EITC, plus penalties and interest.

11 posted on 04/17/2009 12:06:48 PM PDT by Night Hides Not (Don't blame me...I voted for Palin!)
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To: freespirited

Being semi-retired, I worked for a well known tax preparation service one year. I decided to not go back because I didn’t want to be a party to fraud in any way.

Returns are prepared based on the information provided by the client. At times it was obvious that the info provided to qualify for EITC was bogus. But a person who’d earned $12 - $20,000 and could claim a couple of dependents could easily walk out with $4,000 - $5,000 in EITC.

I’d guess half the clients that I dealt with who claimed EITC were providing false information. And some were probably illegal aliens, and some were clearly citizens. It was not the role of the tax preparer to root out the fraud, and that’s probably as it should be.


12 posted on 04/17/2009 12:15:54 PM PDT by Will88
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To: freespirited

I feel a little naive here. Don’t you need a SSN to get EIC? Wouldn’t some fancy computer use the SSN to verify age requirements are met? Don’t you also need a w-2, proving that you actually earned income?

I’ve been amazed at the IRS’s ability to mechanically audit returns. Earlier this week, somebody here mentioned that the IRS found an incorrect 1099 entry, for example. How can they find all this stuff...but not be able to prevent large scale EIC fraud?


13 posted on 04/17/2009 12:18:56 PM PDT by lacrew (Obama and cabinet: Fool and the Gang)
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To: freespirited
There won't be any innuendos about illegals - nope that would be profiling. For that the people in power - the new Nixons - only go after conservatives.

Who wants to bet this kind of tax theft is a yawn for liberals - they're too busy going after their fellow citizens who happen to be conservatives. Why bother with real crimes when you can imply that conservatives are terrorists?

14 posted on 04/17/2009 12:22:28 PM PDT by GOPJ (The New York Times can compress the most words into the smallest ideas of anyone- bow to Lincoln)
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To: Will88

“Returns are prepared based on the information provided by the client. At times it was obvious that the info provided to qualify for EITC was bogus. But a person who’d earned $12 - $20,000 and could claim a couple of dependents could easily walk out with $4,000 - $5,000 in EITC.”

Ok, I’m really showing my ignorance here. Don’t you have to give the SSN for any dependents claimed? Is there some work around, where you fill out a form saying you never got the kid a SSN. Haven’t SSN’s been required for a few decades now, meaning that the vast majority of children of dependent age would have a SSN.

It just seems like the IRS must be turning a blind eye to this...because surely they would recognize the signs of fraud.


15 posted on 04/17/2009 12:23:40 PM PDT by lacrew (Obama and cabinet: Fool and the Gang)
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To: freespirited
There won't be any innuendos about illegals - nope that would be profiling. For that the people in power - the new Nixons - only go after conservatives.

Who wants to bet this kind of tax theft is a yawn for liberals - they're too busy going after their fellow citizens who happen to be conservatives. Why bother with real crimes when you can imply that conservatives are terrorists?

Who wants to bet they go after more conservatives for tax issues than the out and out illegal crooks? Bet on it.

16 posted on 04/17/2009 12:23:56 PM PDT by GOPJ (The New York Times can compress the most words into the smallest ideas of anyone- bow to Lincoln)
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To: devistate one four
If they can’t speak english, I doubt they can read it. Who is aiding these criminals?

The knowledge of how to obtain EITC fraudulently is just "out there". I expect people who know little else about the tax code have learned that much. I worked in tax preparation one year, and was surprised over and over at how "prepared" those claiming EITC were, and how eager. So what if they were occasionally confused about whether an uncle or cousin qualified as a dependent.

I'd bet that the ways to cheat on Medicare, Food Stamps and other programs are just "out there" also.

17 posted on 04/17/2009 12:24:20 PM PDT by Will88
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To: devistate one four

you can get the form in spanish


18 posted on 04/17/2009 12:29:42 PM PDT by Sinschild (I'm for anything that punishes the weak and stupid for being weak and stupid.)
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To: Sinschild

Oh yeah, I forgot for a moment that the libs added that to our services to these criminals.


19 posted on 04/17/2009 12:30:51 PM PDT by devistate one four (CW II on the way! Stand by. TET68)
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To: freespirited

This is somewhat unrelated; but, it reminds me of a gripe that I have. One day I was at a gas station, and the young woman behind the counter was telling her friend what she was going to buy with her tax refund...almost bragging about how big it was.

Well, when a twenty something single mother gets a check that equals half her annual income, it can only be one thing: EIC.

I felt like screaming at her “You didn’t get a REFUND, you got Workfare”. I don’t want to argue the merits of EIC; but, I want people who get EIC to know what they are getting. This same woman has probably been class baited into voting for Democrats, so there would be ‘no tax cuts for the rich’.

Therefore, if I were king for a day, all high school seniors would be taught how to fill out a freakin tax return. It will save them from wasting money paying somebody else to do it. And, it will help them figure out whether they actually pay taxes.

King for a second day...no automatic withholding, make it more real - write a check on April 15.


20 posted on 04/17/2009 12:31:59 PM PDT by lacrew (Obama and cabinet: Fool and the Gang)
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To: lacrew
It just seems like the IRS must be turning a blind eye to this...because surely they would recognize the signs of fraud.

Yes, SSNs are required for the dependents used to claim EITC. I have no idea what verification procedures, if any, the IRS uses. One false claim I know that was made often was to claim cousins or aunts or uncles as dependents. IIRC, those relations do not qualify as dependents for EITC, but the client would just put down a cousin and claim the cousin was a brother or sister.

Another fraud is for two unmarried filers who are living together, to both claim Head of Household, for which they must be living apart and supporting separate households, the entire year IIRC.

(I'm fairly confident my details are correct, but it's been four years since I did any tax work.) And I do think the IRS is turning a blind eye.

21 posted on 04/17/2009 12:34:26 PM PDT by Will88
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To: freespirited
Congress is all for this, they said so in they last attempt to make them all legal.
22 posted on 04/17/2009 12:35:32 PM PDT by org.whodat (Auto unions bad: Machinists union good=Hypocrisy)
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To: Sinschild
you can get the form in spanish

Are you sure about that? Schedule EIC (and Forms 1040 or 1040A to which it must be attached) is in English. If anyone has a link to those forms in Spanish, I'd like to see them.

23 posted on 04/17/2009 12:36:16 PM PDT by 1rudeboy
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To: freespirited
The EITC is the most accessible of the major entitlement programs and used by more people than food stamps and welfare (TANF)* combined.

I know of people who, coming here legally, are asked by others from their country to let them use the SS# of their children in excess of two to get the EITC by letting someone else from their country with no children file as though those children were their own, though they never lived with them a day in their life. The operators promise the immigrants a cut of the EITC in return. I've told a bunch of them that it's illegal to do this, that losing the EITC for 10 years if caught is too big a risk, and that they could also get deported. The operators are quick to badmouth me as someone causing trouble and getting into their business.
24 posted on 04/17/2009 12:40:41 PM PDT by aruanan
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To: Will88
It's not that complicated: the IRS cross-references the SS# of the dependent child. If it appears on more than one form, both are flagged.

The quickest way to get the IRS breathing down your neck is to claim the EITC. Filed correctly or incorrectly, your chances of having your return scrutinized increase by magnitudes. Something like 40% of EITC claims are reviewed/audited, as opposed to less than 1% of returns (the last time I saw the published numbers).

25 posted on 04/17/2009 12:42:54 PM PDT by 1rudeboy
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To: devistate one four

If they can’t speak english, I doubt they can read it. Who is aiding these criminals?’

All the tax prep companies.

Years ago, I was doing bookkeeping for a firm. The owner asked me to help his teen-age daughter who was working part time to fill out her return. He was claiming her as a dependent, and she also was doing so, because of the rules at the time, she could since she was a student.

He also wanted me to claim the EITC for her, and I refused. It led to a spat which never got fully resolved. About 3 months later, I dropped him as a client. He begged me to come back- I told him NO and I told him why not.
Gotta set some lines in the sand-—no matter what.


26 posted on 04/17/2009 12:45:57 PM PDT by ridesthemiles
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To: ridesthemiles

Way to go! Good story.


27 posted on 04/17/2009 12:54:32 PM PDT by devistate one four (CW II on the way! Stand by. TET68)
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To: 1rudeboy

I saw them when I picked up my tax forms this year, but then again I am in Texas.

http://www.irs.gov/pub/irs-pdf/fw5sp.pdf appears to be the form I was looking at though. I might be mistaken on those particular forms being published in spanish. I will investigate further.


28 posted on 04/17/2009 1:02:57 PM PDT by Sinschild (I'm for anything that punishes the weak and stupid for being weak and stupid.)
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To: 1rudeboy
It's not that complicated: the IRS cross-references the SS# of the dependent child. If it appears on more than one form, both are flagged.

I have no idea what percentage of the fraud the IRS might catch, but many of the people who falsely file for EITC probably know the details most likely to get them caught. People would come in with their list of dependents and SSNs. Most might be aware enough to not claim a dependent whose SSN would appear on any other return. But claiming someone as a dependent who is not a dependent is what the defrauders must do to obtain maximum EITC.

I think some claims were 100% bogus (no legitimate dependents), and other claims were by people who did provide support for a cousin or friend who did not qualify them for EITC.

29 posted on 04/17/2009 1:53:51 PM PDT by Will88
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To: Will88
From my limited experience, a good number of cases involved a divorced/separated/estranged couple who both claimed the child. The common theme always appeared to be an unscrupulous tax-preparer who egged one or the other on.

"Just fill out this form, put the number on the line, and wait for your check." The ramifications would never be discussed (according to the poor sop getting the notice).

30 posted on 04/17/2009 2:00:25 PM PDT by 1rudeboy
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To: 1rudeboy
a good number of cases involved a divorced/separated/estranged couple who both claimed the child.

Probably so, a lot involve that sort of thing. And some involve pure fraud, a taxpayer earned $20,000 or so, but if they can come up with a couple of "qualifying children" or dependents, then they can get back close to $5,000.

Of course, any taxpayer with low, qualifying earnings is eligible for some EIC as an individual. But they need a couple of dependents to get the big bucks. That's where some of them (who supported no one other than themselves) get very creative.

31 posted on 04/17/2009 2:33:45 PM PDT by Will88
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To: lacrew
I feel a little naive here. Don’t you need a SSN to get EIC? Wouldn’t some fancy computer use the SSN to verify age requirements are met?

I'm no tax expert, but based on a column by Kevin Mooney (who attended the press conference) it appears that the answer is yes, a SSN is needed.

Apparently that's no problem, these folks know how to steal legitimate SSN numbers. Also, Mooney quotes someone from the news conference who said the IRS makes little or no effort to verify the legitimacy of the SSN on these claims.

Sounds like it's just another income redistribution scam.

Mooney column

32 posted on 04/17/2009 9:39:24 PM PDT by freespirited (Is this a nation of laws or a nation of Democrats? -- Charles Krauthammer)
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To: 1rudeboy
Someone is useing my grandson's SS#, has been for about 4 yrs now.

My daughter has been fighting this with IRS, she has to prove he is theirs, yet they finally found his SS# card. Which was filed away for safe keeping don't you know that one?

I think they will be able to get something done about this soon. Will the other's be prosecuted?

33 posted on 04/17/2009 10:11:51 PM PDT by annieokie (i)
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To: freespirited

Big surprise.

The Tax Cheat will remedy this.


34 posted on 04/17/2009 10:12:54 PM PDT by Jet Jaguar (Atlas Shrugged Mode: ON)
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To: ridesthemiles

Good for you, Thanks. I would be the same way.


35 posted on 04/17/2009 10:13:07 PM PDT by annieokie (i)
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