Indiana lawmaker asks Congress to eliminate tax credits for undocumented workers

FILE - In this June 17, 2017 file photo, Rep. Luke Messer, R-Ind., appears on Capitol Hill in Washington. (AP Photo/Andrew Harnik, File)

WASHINGTON, D.C. (WTHR) — An Indiana congressman is again urging Congress to eliminate tax credits for undocumented workers.

Rep. Luke Messer spoke on the floor of the U.S. House of Representatives last week, asking House colleagues to support House Resolution 2817. The legislation would allow only taxpayers with Social Security numbers to claim the Child Tax Credit, which provides a federal tax credit of $1,000 per child for low-income families. Messer filed the legislation earlier this year, citing a WTHR investigation that exposed many undocumented workers are claiming the tax credits for children who have never lived in the United States. A separate investigation by the Treasury Inspector General for Tax Administration (TIGTA) revealed more than $4 billion annually is paid in Child Tax Credits to undocumented workers.

Following WTHR’s 2011 investigation, the Internal Revenue Service announced it would make changes to help prevent fraud, to better identify those who were improperly claiming the tax credits, and to warn unsuspecting taxpayers whose Social Security numbers were stolen by undocumented workers for the purposes of filing tax returns. But follow-up investigations by WTHR found the IRS instead told its workers to ignore the fraud, and 13 Investigates discovered a recent TIGTA audit that shows the IRS did not implement many of the changes, failing to notify millions of U.S. taxpayers that they have been victims of identity theft.

“We can’t continue to reward people who come to our country illegally, while those who work hard and play by the rules struggle to get ahead,” Messer said on the House floor last week. “My legislation would stop billions of taxpayer dollars from going to illegal immigrants by eliminating a loophole in our tax code. This money should be used to increase the Child Tax Credit for law-abiding, American families.”

Messer recently sent a letter to the chairs of the House Ways and Means Committee and Senate Finance Committee, urging them to put the provision in the tax cut plan that will soon be considered by lawmakers.

Earlier this year, President Trump presented Congress with a budget request that includes eliminating Child Tax Credits and the Earned Income Tax Credit for anyone who does not have a valid Social Security number. The proposal is expected to save an estimated $40 billion over a decade.

Current IRS policy allows undocumented workers to file tax returns and to claim tax credits by using an Individual Taxpayer Identification Number (ITIN), which is issued regardless of immigration status. Messer and other critics say the policy is unfair to American citizens who must pay billions of dollars in tax credits to undocumented workers who came to the U.S. illegally. The IRS has defended the policy, claiming it ensures millions of undocumented workers continue to pay taxes, providing the U.S. Treasury with billions of dollars. And some lawmakers are hesitant to eliminate the tax credits for undocumented workers because the money benefits the workers’ children, who often times were born in the United States and depend on the tax credits for essentials such as food and education.

You can see WTHR’s full “Investigating the IRS” series by clicking here.