ITIN: The Massive Tax Loophole Allowing Illegal Aliens to Defraud American Citizens

In 1996, the IRS began issuing a new type of tax identification number, the Individual Tax Identification Number (ITIN). ITINs are assigned to U.S. taxpayers, predominately illegal aliens and their dependents, who are not eligible to obtain a Social Security number.  The primary purpose of ITIN’s was to capture the previously untapped source of new federal tax revenue from undocumented workers.

• According to the National Immigration Law Center, the most recent information (August 2012) indicated that there had been 21 million ITINs assigned to taxpayers and their dependents by the IRS. 
• ITINs assigned to illegal alien dependents from Mexico do NOT have to prove that they have ever set foot in the U.S., let alone that they are in the U.S. at the time of application. 
• Over 9 years and up to 2010, the IRS paid over $14.2 billion of American tax dollars in refunds to illegal aliens, for alleged dependents from whom no identification or residency documents were obtained, and from whom they received $0 in tax revenue...

According to the IRS, ITINs are allegedly issued solely as a means for illegal aliens to pay federal taxes, but in reality they are used by more illegal aliens who actually pay no taxes and who file federal tax returns only to claim tax refunds mainly through the Child Tax Credit (CTC), Additional Child Tax Credit (ACTC), and the Earned Income Tax Credit (EITC), on a retroactive basis (up to 3 years).  The Child Tax Credit may allow the filer to reduce their federal income tax by up to $1,000 for each qualifying child.  Under ITIN, illegal aliens can claim up to TWENTY children...

... the Additional Child Tax Credit is the refundable amount of credit that is available above the amount needed to offset their taxes.  This means that families can receive refunds even if they do not owe any tax.

Under the American Recovery and Reinvestment Act (ARRA), commonly referred to as the “Stimulus,” signed into law by Barack Obama in February 2009, the minimum earned income amount used to figure the ACTC was reduced to $3,000, from its scheduled amount of $12,500...

ITINs assigned to illegal alien dependents from Mexico do NOT have to prove that they have ever set foot in the U.S., let alone that they are in the U.S. at the time of application...

More information

The Earned Income Tax Credit and Illegal Immigration: A Study in Fraud, Abuse, and Liberal Activism, by financial analyst and economist Edwin Rubenstein, published by The Social Contract, 2009, with a 2013 update.