President Obama's State of the Union address called for the restoration of an America "where everybody gets a fair shot." Today, however, nearly one-fourth of our nation's children live in poverty -- a figure that is inexcusable. That is why it is so alarming that some Washington politicians want to raise taxes on working families, denying parents who work hard every day a fair shot at supporting their children and making the child poverty rate even worse.
The Child Tax Credit helps parents protect their kids from the worst effects of a bad economy. This need is more urgent today than ever, considering child poverty is at a 20-year high. Created by a Republican-controlled Congress led by House Speaker Newt Gingrich and Democratic President Bill Clinton, the Child Tax Credit was designed to help working parents manage the high costs of raising children. And it does just that, partially offsetting payroll taxes for parents to make it easier for them to meet their family's basic needs.
Speaker John Boehner has said, "I think raising taxes in a very weak economy is a really, really bad idea, and most economists would agree with that." However, some Members of Congress now seek to deny millions of families this important credit, and thus, would raise their taxes. They want to prohibit working parents who file and pay federal income taxes using an Individual Taxpayer Identification Number (ITIN), instead of a Social Security Number, from claiming the credit for their children. This would impact immigrant-headed families, many of whom utilize ITINs to file their taxes. Ultimately, this change could raise taxes on the families of up to 5.5 million children, the vast majority of whom are U.S. citizens and live in low-income families.
This tax hike would fall on those who can least afford it. Families affected earn an average of $21,000 per year. Denying them the Child Tax Credit would take an average of $1,800 a year out of the pockets of children and families already living at or below the poverty line. That's money that families will no longer have to spend on things like groceries, clothing, and child care. Politicians say they want to offset the budget impact of the temporary payroll tax holiday, but the damage to kids would be permanent. Certainly Congress can find a better offset that wouldn't harm our nation's most vulnerable children.
In America, harming 5-6 million of our nation's children and our next generation of leaders makes no sense. Let's remember what we really value: a country where hard work pays off and our leaders make it easier to keep your family afloat during tough times. We must say no to mean-spirited political attacks and legislative proposals that would drive child poverty even higher.
Follow Bruce Lesley on Twitter: www.twitter.com/brucelesley
http://www.irs.gov/publications/p501/ar02.html
“Who Should File
Even if you do not have to file, you should file a tax return if you can get money back. For example, you should file if one of the following applies:
…………..
4 You qualify for the additional child tax credit. See the instructions for the tax form you file (Form 1040 or 1040A) for more information on this credit. “
http://www.treasury.gov/tigta/auditreports/2009reports/200940057fr.pdf
“Some of the erroneous refunds resulted from the same individual filing multiple tax returns under the different identification numbers and receiving a tax refund for each.”
‘Although the IRS has data available to identify employers reporting wages and individuals improperly working under an ITIN, no significant actions are taken to address the noncompliance.”
“The Senate Finance Committee was concerned about the IRS’ decision to expand e-filing to these individuals. The Senate Finance Committee questioned the rationale behind the IRS’ decision to make it easier to e-file a tax return that contains a stolen or false SSN. The IRS responded that it changed its policy to allow e-filing to make the process consistent with paper returns. Further, according to the IRS:”…
Plus, FRAUD IS WIDESPREAD among ITIN filers.
The ITIN program was intended for non-immigrant aliens (mostly INVESTORS). This whole mess is the missinterpretation of the law by the IRS.
Most of the ITIN filers do file ONLY TO GET THE ACT, because their tax liability is "$0.00"
Among the fraud:
- Phony W-2's, (most likely this person was paid "under the table")
- Phony "birth certificates", for the "children" claimed for the ACTC.
- Filing multiple times with different ITIN numbers.
- Filing for "back years"
Final Audit Report – Procedures Need to Be Developed for Collection Issues Associated With Individual Taxpayer Identification Numbers (Audit # 200940042) http://www.treasury.gov/tigta/auditreports/2010reports/201040040fr.pdf
“From a statistical sample of 96 records from a population of 551,108 Tax Year 2007 returns:
4 records (4 percent) showed the taxpayer filed a tax return using an ITIN but used another person’s name and Social Security Number to work (possible instances of identity theft).
73 records (76 percent) showed the taxpayer used his or her name but another person’s Social Security Number to work.
19 (20 percent) records that included Wage and Tax Statements (Form W-2) could not be matched to any employers’ records.”
http://thinkprogress.org/economy/2012/02/02/417488/florida-gop-alec-forget/