Updated 06:34 PM EDT, Wed, Apr 24, 2024

Sen. Kelly Ayotte Stokes Hornet's Nest with Proposal to End Child Tax Credit for Undocumented Workers

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A U.S. Senator from New Hampshire is pushing hard to extend unemployment benefits and repeal pension cuts for veterans. To the consternation of many, they claim she is apparently attempting to do so by pushing the economic burden onto the backs of undocumented immigrants.

"We can pay for a temporary long-term unemployment benefit extension and repeal unfair military retiree benefit cuts without adding to our country's $17 trillion debt," U.S. Senator Kelly Ayotte (R-NH) said in a statement announcing her proposal. "I've put forward a common sense proposal that would save billions by stopping illegal immigrants from claiming the additional child tax credit (ACTC). If Senate Democrats allow a vote on my amendment, we'd have a solution that could immediately deliver temporary help to those looking for work, prevent military retirement benefit cuts, and reduce the deficit."

Of course, there was an immediate reaction.

"Looks like Sen. Kelly Ayotte (R-N.H.) is shining her Tea Party shoes to prepare for a possible shot at the 2016 GOP vice presidential nomination," wrote Fernando Espuelas on The Hill. "What else would explain her explosive, morally dubious proposal to end the Child Tax Credit for undocumented workers who pay their taxes like every other American?"

But Ayotte is quick to point out that the use of the ACTC by undocumented workers is not quite "like every other American." Undocumented workers filing tax returns do so through the use of individual tax identification numbers (ITIN). Claims for dependents are often made without any supporting documentation, which might leave the door open for fraudulent claims. The IRS has said that they do not have the authority to "verify and disallow the Child Tax Credit and the Additional Child Tax Credit during return processing simply because of the lack of documentation."

According to the Treasury Inspector General for Tax Administration (TIGTA), these claims have skyrocketed to $4.2 billion in refunds to undocumented workers in 2010. TIGTA is pushing for more action on the part of the IRS to reduce fraud through the use of the ACTC. The IRS has rebuked most of the recommendations of the TIGTA, citing a lack of authority in carrying out recommended measures.

An investigation into the fraudulent use of ACTC by WTHR in Indiana exposed several blatant uses of the tax credit by undocumented workers to receive large refunds well in excess of $10,000 each. The investigative team found cases of several workers using the same address to claim dependents though they only saw one child actually living at the address. Many of the claimed children were actually nieces or nephews of the worker filing the return, and that they all actually lived in Mexico.

"If the opportunity is there and they can give it to me, why not take advantage of it?" the worker told WTHR.

"Other undocumented workers in Indiana told 13 Investigates the same thing," the investigative team continued. "Their families are collecting tax refunds for children who do not live in this country. Several of the workers told WTHR they were told it was legal for them to claim the tax credit for a child who does not live in the United States."

Sen. Ayotte sees these funds as a way to balance out obligations to U.S. servicemen who are seeing the value of their past service being deteriorated.

"This amendment fully pays for both a three month Unemployment Insurance (UI) extension and a repeal of the harmful cost of living reduction for military retirees (including disabled military retirees) that was included in the budget agreement passed by Congresson December 18, 2013," Ayotte writes. "Instead of making our nation's veterans pay for the fiscal irresponsibility in Washington, the amendment makes a simple fix in our tax code to require that filers have Social Security Numbers in order to qualify for the Additional Child Tax Credit (ACTC)."

Espuelas, who says that Ayotte's proposal was "fished" from previous anti-immigrant legislation, says that workers using the ITIN system are already a net plus to the tax rolls and not a detraction from them.

"Millions of immigrants stepped forward and fulfilled their responsibility," he writes. "Today the ITIN delivers a net multibillion-dollar gain for the federal, state and local treasuries, even when factoring in the Child Tax Credit. It is an important contributor to Social Security and Medicare as well."

He also concludes with a stark warning to any other senators who might be thinking of signing on to Ayotte's proposal.

"Any politician running for office in 2014 has to face the stark reality that the Latino vote is growing and will be the margin of victory or loss for several Senate and congressional seats across the country," Espuelas writes. "Any current politico who signs on to Ayotte's attack on poor children will face a highly motivated, organized and increasingly well-financed Latino electorate enthusiastic to vote out the Tea Party madness that has gripped our nation."

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