Gaming the System: Illegal Aliens - 1, Unemployed Americans - 0

By Dan Cadman on January 12, 2014

Most readers are probably aware that one of the budget battles consuming the Senate is whether to pass an act extending now-lapsed unemployment benefits for the long-term unemployed. The majority of Republicans have indicated a willingness to consider any substantive bill only if it is considered in combination with other measures to offset costs.

One such measure, promoted by Republican Sen. Kelly Ayotte of New Hampshire, would offset costs by "rein[ing] in fraud among illegal immigrants taking advantage of child tax credits."

Sounds like a win-win situation, doesn't it? Provide chronically unemployed citizens and lawfully authorized workers some relief in uncertain times, while ensuring that those who aren't entitled don't game the system.

And game the system they do, for staggering amounts.

The Treasury Department's Inspector General found that in 2010, the IRS paid out $4.2 billion to illegal aliens for dependent claims — much if not most of it fraudulent and based on nonexistent dependents, or on children still residing in their home countries and therefore ineligible to be claimed as dependents. The dollar amount claimed was up over 400 percent, from less than $1 billion (still a staggering figure) in 2005. There is no evidence whatsoever that the fraud or the amount of money has abated.

The ease with which the fraud is committed was revealed by an investigative reporter in Indiana in 2012:

An undocumented worker in southern Indiana told 13 Investigates just how easy it truly is.

He said four other illegal immigrants file tax returns using his address, even though none of them actually lives there. And he said this year those four workers filed tax returns claiming 20 children live inside his small trailer home. As a result, the IRS sent the illegal immigrants tax refunds totaling more than $29,000.

But none of the 20 children listed as dependents on the tax returns live in Indiana — or even in the United States.

"No, they don't live here," admitted the undocumented worker, who lives with his young daughter. "The other kids are in their country of origin, which is Mexico."

So, what was the response of Senate Democrats to this common-sense proposal?

Senate Majority Leader Harry Reid said Wednesday that he's open to paying for the jobless aid extension, but only if Republicans propose an offset that Democrats can support.

Go figure.