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IRS Legalized Illegals and Hid Information about Illegal Aliens

4 min read

The Treasury Inspector General for Tax Administration (TIGTA) recently noted that seventeen years had passed since the IRS’s policy decision to legalize illegal aliens.  The IRS decided to treat illegal aliens the same as legal immigrants and U.S. citizens. IRS officials also determined that they would not hand any information about employers hiring illegal aliens over to federal immigration authorities, nor would they report illegal aliens who filed false documents with the IRS.

The results were predictably absurd: in 2011, the IRS paid over $46 million in tax refunds to 23,994 illegal aliens living at the same Atlanta address.  The IRS’s regulation, which stated that the service would issue Individual Taxpayer Identification Numbers to illegal aliens not qualified to work in the United States, also said that Section 6103 of the Internal Revenue Code would apply to the ITINs.  Section 6103 requires tax information to remain confidential.



This was the IRS’s way of getting around Section 642 of the Immigration Reform and Immigration Responsibility Act, which directly stated that no other law, official, or entity could prevent any agency from providing information about illegal aliens to the Immigration and Naturalization Service.  Passed in 1996 and signed into law by President Clinton, the law paved the way for information sharing among agencies.

That is, until the IRS decided to flout the law and aid and abet illegal aliens living in the United States with ITINs, which could then be used to make the lives of illegals living in the U.S. far easier.  Despite the fact that Congress explicitly said agencies were to share information about illegal aliens with the INS, the IRS decided to provide protection to illegal immigrants by keeping their ITIN information secret under Section 6103.

The Inspector General excoriated the IRS in a September 1999 report, noting that “…Congress has clearly stated how the federal government is to communicate between agencies concerning illegal aliens. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (the Illegal Immigration Reform Act) states that information concerning illegal alien status should be provided to the Immigration and Naturalization Service (INS) notwithstanding any other law.”  Furthermore, the IG found that the IRS’s deliberate intent was to withhold the information from the INS and impeded its progress in deporting illegal aliens.

Illegals were effectively legalized under the policy and given access to tax benefits reserved for citizens, such as spousal exemption, standard deductions, and earned income credits.  As the IG put it in his report:

“This IRS policy, to ‘legalize’ illegal aliens, seems counter-productive to the Immigration and Naturalization Service (INS) mission to identify illegal aliens and prevent unlawful alien entry.”

In various follow-up reports, the IG highlighted concerns over the misuse of ITINs by terrorists, noting that it would be “easier for terrorists…to operate in an open society while planning hostile actions.” By 2003, Assistant Inspector General Gordon C. Milbourn was raising alarms about illegal aliens with ITINs committing identity theft through the use of Social Security Numbers.  In 2004, the TIGTA report noted that the fraudulent use of a Social Security number was a felony.

The report highlighted the use of 265,000 SSNs issued to U.S. citizens used by illegal aliens, along with an additional 89,000 SSNs that were never issued by the Social Security Administration to anyone.  Though the report recommended the IRS cooperate with INS and the SSA to prevent identity theft by illegal aliens, the IRS continued to argue that Section 6103 needed to be changed before it could do so, despite the fact that the illegal aliens in question were committing felonies by using fraudulent SSNs.

By 2007, the TIGTA report found that $1.8 billion in Additional Child Tax Credits had been paid to ITIN filers.  In 2010, President Obama’s stimulus law made the ACTC even more lucrative for illegal aliens, paying out $4.2 billion.  In July 2012, two IRS employees alleged the IRS management was forcing lower level employees to issue ITINs for fraudulent applications.

Throughout the 17 years that the IRS has turned a blind eye towards Social Security fraud, identity theft, and illegal aliens living in the United States, it has prosecuted American citizens to the fullest extent of the law.  The IRS’s claim that it cannot share tax information by law is rendered absurd by the fact that it shares information on taxpayers with unpaid tax liabilities with DHS in order to enable DHS to detain those individuals at the border to collect their unpaid liabilities.  It strains credulity to believe that the IRS can share this information on U.S. citizens traveling abroad, while having a puritanical objection to violating the confidentiality of tax records relating to illegal aliens with ITINs.

If you’re a criminal tax dodger, your information can be shared with other government agencies in order to enable collection of your liability. If you’re a criminal illegal alien, in this country illegally, committing a felony with fraudulent Social Security Number, your information can’t be forward to immigration authorities.  The absurdity of the argument is obvious.  Nevertheless, despite the documented evidence, compiled in years worth of the  TIGTA reports on the subject, Darrell Issa and the Republicans on the House Government Oversight Committee are unable or unwilling to confront this aspect of IRS misfeasance.

H/T: CNS News 

jay batmanJay Batman is a graduate of the Texas Tech University School of Law, where he attained his J.D. in May 2013.  He completed a B.A. in English with a minor in Political Science at the University of Montevallo in 2002. He is employed with Dustin Stockton Political Strategies, LLC, and presently resides in West Texas with his dog and co-author, Buddy Love – See more at: