Stoffa: $4.2 billion paid through abuse of the U.S. tax system

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Unauthorized entrance prohibited

Gabriel Stoffa

In the swings candidates are taking against President Barack Obama to gain support, the issue of finances has been one of the most solid punches. Illegal workers is another of those body blows Obama has had to suffer.

Put the two together and you don’t necessarily have a knockout punch, but in the people’s eyes, the two could bring on a judgement against the current commander in chief, be it warranted or not.

So here is the lowdown:

A report from the Treasury Inspector General for Tax Administration offers up the information in an audit that undocumented workers laid claim and collected $4.2 billion last year, compared to five years ago when the amount was less than $1 billion.

How is this massive sum of money coming into play? Well, it stems from the Additional Child Tax Credit, which is the result of vague U.S. law compounded with tax credit in stimulus legislation. Even if no income taxes were paid, one of these workers could go ahead and profit by claiming.

“The payment of federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside and work in the United States without authorization, which contradicts federal law and policy to remove such incentives,” according to the report.

How this loophole has persevered over the years I do not know, and it is probably too convoluted to discover the reasoning — I would venture the guess of mere oversight due to the confusion and time delays assessing taxes can entail, but that might be me being generous — but to be certain, it is something that needs to be remedied.

Apparently even those people who are not authorized to work in the U.S. are still expected to pay IRS taxes; yeah, I don’t understand that logic either.

Because those folks that aren’t supposed to be working still do but do not have Social Security numbers, they are issued Individual Taxpayer Identification Numbers. Yep, we know they are breaking the rules, but we still want our cut.

Now, I don’t see any way in which to stop the flow of undocumented workers any time soon, but measures to cut back on paying money to those not following the rules is something most voters would probably support.

Whether or not this is really Obama’s fault isn’t the issue, so much that it makes for an influential sound byte to sway some folks as the competition for the highest office continues to play out.

But back to the actual notion involved, isn’t there a little bit of a question as to why we are allowing the benefits of proper citizens to those who are not?

The immigration status of any legal immigrant that works without authorization would be in violation, so why did the system allow for the undocumented workers to benefit so much in the first place?

This isn’t an attack so much on illegal immigrants and the like, but on the holes in our system that allow for billions of dollars to flow out of the coffers unnecessarily.

The IRS did agree in a statement with the advice of the report that future payments of this sort should not occur, and it is great to plug this hole, but what is going to be done about the damage done?

The money cannot be taken back, so really all that is left to try to make amends is for some savvy politicians out there to get back on pushing agendas to deal with immigration and taxes.

So where are we after all of this? Well, not really anywhere. We have another sucker punch to bring to the presidential ring, but other than that — and I doubt it will even be utilized — all we have is another mistake in the system most Americans can look at and hope that no bigger errors are lurking behind the red tape.