Why are illegal immigrants receiving up to $4.2 billion in child tax credits annually with the condition the children reside in the US for at least six months out of the year, yet an audit by Treasury’s Inspector General shows said children are full-time residents of Mexico and that is if the kids even exist.

Channel 13 Eyewitness News out of Indianapolis recently exposed this IRS ‘loophole’ and is reporting that Congress has taken it up and is currently debating it within HR 5652 ” Here is WTHR’s latest report.

INDIANAPOLIS – More than three million people have watched WTHR’s “Tax Loophole” investigation online within the past week, and many lawmakers are among them. Thursday in Washington, members of Congress debated the problem exposed by 13 Investigates.

by Bob Segall

Thursday was business as usual on the floor of the U.S. House of Representatives.

Democrats and Republicans spent hours arguing and criticizing one another as they debated a controversial package of spending cuts known as House Resolution 5652.

But Thursday was also different. For the first time, House members debated whether to close a tax loophole that’s providing big tax refunds to illegal immigrants. It’s something Congressman Sam Johnson (R – TX) has been wanting to do for years.

“Due to a loophole in the tax code, the IRS is shoveling out billions on American tax dollars to those who are here illegally,” said Rep. Johnson.

Bolstered by an Eyewitness News investigation, Rep. Johnson and other Republicans made their case for closing the loophole that is now making national news.

Two weeks ago, 13 Investigates showed how millions of illegal immigrants are taking advantage of tax credits intended for working families with children. WTHR’s investigation documented how many undocumented workers file tax returns using an ITIN (individual taxpayer identification number) to claim thousands of dollars in Additional Child Tax Credits.

IRS tax code currently allows illegal immigrants to claim the fully-refundable tax credits as long as the children listed as dependents live in the United States and with the tax filer for at least six months of the year. Eyewitness News showed many undocumented workers are cheating the system by instead claiming nieces and nephews who live in other countries. The IRS issues them tax credits anyway because the agency does little to verify ITIN documentation.

According to an audit report by the U.S. Treasury Department’s Inspector General for Tax Administration, the problem now costs American taxpayers $4.2 billion per year. The inspector general has been warning the IRS and Congress about the abuse since 2009, but most members of Congress seemed unaware of the problem – until now.

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