How does it feel to find out that hundreds of millions of your tax money – and probably billions over a decade – are going to people who broke into the country, and the government is almost certainly doing it for partisan political reasons? Or to find out that one of the most powerful agencies of the federal government is being used to intimidate Obama’s political opponents?
I know. Nothing much seems to shock us anymore. Almost daily we are reminded that this administration is engaged in despicable, underhanded and illegal activity to hold onto the reins of power.
The chairman of a congressional subcommittee that oversees the IRS is suggesting the IRS take time off its unsavory political forays to look into the multi-billion dollar scam of the Child Tax Credit perpetrated by literally hundreds of thousands of temporary workers and illegal aliens. An IRS Inspector General’s report says we are losing millions in the fraudulent use of the Child Tax Credit by persons using the ITIN program, which is available to non-citizens.
The ITIN is the Individual Tax Identification Number, and it is available to foreign guest workers who work legally and file federal tax returns. But it has also become widely used by illegal aliens.
Now, it so happens that the IRS has no objection to the use of the ITIN by illegal aliens because it wants the money from those tax filings. Yet the IRS also seems happy to allow illegal aliens to collect Child Tax Credit refunds running into the hundreds of millions of dollars.
Now, you might be thinking this is another example of Obama’s stealth amnesty for illegal aliens. Not only will we not deport illegal aliens “who have no criminal record,” we will turn a blind eye to tax fraud as well. But in this case, this particular scam goes back at least a decade.
So, why is this scam not stopped? The short answer, again, is politics.
What is most scandalous in the IG report is not the potential amount of money involved in the fraudulent payouts but the finding that IRS supervisors actively blocked efforts to investigate the extent of fraud and set up new controls. In fact, even today, IRS management is disputing the IG report’s conclusions and downplaying the extent of the fraudulent tax filings.
It so happens that the ITIN tax filers’ abuse of the Child Tax Credit is a topic I personally investigated back in 2004 and 2005 as a sitting member of Congress. I was alerted to the problem by a whistleblower in one of the IRS regional offices. The whistleblower came to me when his efforts to get top-level attention to the problem met with resistance.
A small group of regional auditors had concluded that tens of thousands of illegal aliens – the exact number was unknown – were gaming the system and receiving million in Child Tax Credit refunds by claiming large numbers of unverified dependents, among other unlawful tricks. Many of the claimed dependents were children not even living in the United States – they were living with relatives in foreign countries, from Mexico and Guatemala to Vietnam and Ghana. Based on their examination of a sample of several hundred ITIN filings, the whistleblower estimated that the total amount of taxpayer funds involved fraud probably ran to $300 million or more annually.
Where are the politics in this story, you ask? This small team of regional auditors finally persuaded upper management in Washington, D.C., to launch an investigation, and a pilot project was begun to examine a larger sample of ITIN filings. That pilot project was aborted under political pressure from the when the Congressional Hispanic Caucus objected to the project as “racist.”
So, the problem is not that the IRS is full of politically motivated bureaucrats more than any other agency. Like other agencies, the IRS gets its marching orders from congressional committees and from the White House – in other words, from politicians. So, if the White House sends strong signals it wants the agency to march left, it will march left.
What else has the IRS been doing with its investigative resources? The Wall Street Journal and other news organizations have been full of stories the past few months about wealthy donors to the Romney campaign suddenly being targeted for IRS audits. But the really alarming thing about such stores is that no one is surprised.
If citizens are not surprised, maybe the political abuse of IRS powers is no longer a rare event.
Nonetheless, Obama’s use of the IRS to intimidate his opponents’ donors in the middle of a presidential election campaign surely sets a new standard for the brazen abuse of power through the IRS.
Idaho businessman Frank VenderSloot is a prominent supporter and national co-chairman of Mitt Romney’s finance committee. Never before had he faced an IRS investigation or audit, but this spring he and his wife were told one is underway. And by the strangest of coincidences, Obama’s federal Department of Labor has told him his use of legal immigrant labor on his cattle ranch will also be investigated.
This is a pure coincidence, right? Anyone who believes that probably also thinks “Chicago politics” is a synonym for a voter registration drive at a local Wal-Mart.
If Obama is given a second term, we can expect to see even more abuse of the IRS for political purposes. Not only political opponents but nonprofit organizations out of favor with the White House can expect to be audited and harassed. The Boy Scouts can legally deny openly homosexual men from becoming scoutmasters. But an Obama executive order could attempt to deny them its tax exemption or create insurmountable obstacles, thereby paralyzing its funding base.
Obama allies contemplating such expanded political use of the IRS would do well to remember that the American Revolution began as a citizen protest against abuse of the taxing power.