IRS Paid Illegal Immigrants $4.2 Billion in Fraudulent Child Care Credits

IRS Paid Illegal Immigrants $4.2 Billion in Fraudulent Child Care Credits

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Paul Caron reports that the rumor that illegal immigrants received $4.2 billion in fraudulent Child Care tax credit payments from the IRS is true:

Following up on last week’s post, Illegal Immigrants’ Child Tax Credit Fraud Costs IRS Billions:, Tax Credits for Illegal Immigrants:

Q: Does the IRS pay billions in tax refunds to workers who are in the U.S. illegally?

A:  Yes. The Treasury Department’s Inspector General determined that $4.2  billion was paid in 2010, up from less than $1 billion in 2005. Leading Democrats are resisting a bill that would stop future payments.

This is a rare case of an Internet rumor with some substance to it. In fact, it’s shaping up as a major dogfight in Congress. At issue here are the federal child tax credits that can be claimed by persons with dependent children under age 17. Some Democrats are already defending these child tax credit payments that have gone to those without a valid Social Security number, accusing Republicans who want to end them of a heartless attack on children.

Several different versions of this viral email all cite a recent investigative story by an Indianapolis television station, but WTHR-TV is far from the first to notice. The Washington Post and others reported on this last year when the Treasury Department’s inspector general for tax administration issued a report on July 7, 2011. The title of the report summed up the IG’s finding: Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits.

The credits currently amount to $1,000 per child, and they are “refundable,” meaning that parents may receive refunds even when they do not owe any tax.

The IG report stated that more than 2.3 million persons who did not have Social Security numbers valid for working in the U.S. got an  average of roughly $1,800 each in 2010 in child tax credit refunds. That included 9,000 illegal immigrants who each got a total of $10,000 or more by retroactively claiming credits for tax years prior to 2010.

The $4.2 billion paid to these illegal immigrants was paid by the 50% of Americans who actually pay federal income taxes.

About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida


  1. Unbelieveable. The illegals are stealing our taxes that we paid and the democrats are supporting them? They should all go back to where the illegals came from and support them there!