Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 11 Comments

Here at Brock, we worry – well some of us do – quite a bit about the omnipotence of the IRS and the United States government when it comes to financial institutions and taxes, but should we?

In addition to the many, many corporations and uber wealthy that seem to routinely use tax law loopholes (often written into the tax code by lobbyists they employ) to pay as little tribute to the empire as possible, it seems that undocumented workers in the United States are able to do the exact same thing. And what’s more, the IRS and members of Congress know about it and haven’t done anything to stop it.

Four billion dollars have flown out of the USA’s coffers every year for past several years in the form of a child tax credit that enterprising illegals are claiming for kids who don’t live with them and sometimes aren’t even living in the United States at all.

According to the Inspector General, interviewed in the following news vid, once the IRS issues a refund check to a “taxpayer” that money is nearly impossible to recover.

Which brings me to my point. The IRS, that Americans outside the actual physical boundaries of continental America are being told by various tax compliance agencies and entities to fear more than the Grim Reaper, is seemingly powerless to stop actual fraud – for which they have actual proof – practically down the street from it. What power then do they really have over USP’s who live across international borders and are often citizens of other countries?

In a recent discussion thread on another post, Petros – again – reminded us that those who have no ties to the USA, or need to venture there, should take time and consider the long-term ramifications before back filing any type of compliance forms (before or after) when renouncing US citizenship. He pointed out that for many – duals especially – the IRS doesn’t know they exist. Why feed the USG’s info beast? What can the really do? I mean really do. Not theoretically. What is the actual damage? And what are the real odds? And if the IRS doesn’t care about 4 billion dollars being stolen from it by people they can put their hands on, what do they really care about law abiding duals who don’t owe taxes in the first place?

Yes, FATCA is … probably … coming in some form or other and hiding will do a person no good in the longer run (although truthfully, no one is truly invisible anymore thanks to technology), but allowing fear of an agency that isn’t even able to control fraud and evasion within its own borders be the driving factor behind decisions is something that might be cause for pause.

I encourage you to watch the video. It’s not new news in terms of the hysteria in the US about undocumented workers and fraud, but it puts the dilemma, at least for me, of USP’s who’ve emigrated in another context.

The point of FATCA and the offshore jihad on expats is not about money. It’s about information, and information is power.

http://www.youtube.com/watch?feature=player_embedded&v=3eQZoXAU7X0

11 thoughts on “IRS Refunds 4 Billion Dollars a Year to Illegal Immigrants”

  1. What the USG lacks in competency, it makes up for in the willingness to extort from other nations and their financial institutions what they are incapable of doing themselves. The US could do a lot worse than having wealthy Canada as where the 2nd greatest number of Americans in the world live, couldn’t they? When I think about so many dual Canadians with bank accounts brimming with RRSP’s, TSFA’s, RESP’s, RDSP’s being taxed and penalized only to have it vaporize upon arrival at that BASKET CASE, it makes me want to spit!

  2. Of course, child Tax credits are only one problem. If you want page after page after page, you only need to look at this search .. http://bit.ly/11L0L1m

    But not to worry, they are holding hearings in the Senate Finance Committe on all the areas of tax fraud and “Enough is enough,” said Baucus. “It is time to act.” so it should all be ending soon!

    And what are some of the solutions?

    Three weeks ago, members of the Senate Finance Committee were briefed on tax reform options that included proposals to help combat tax fraud and tax ID theft. Senator Bill Nelson, D-Fla., joined by Senators Benjamin Cardin, D-Md., Charles Schumer, D-N.Y., and Diane Feinstein, D-Calif., introduced comprehensive tax fraud legislation last week.

    Baucus noted that the Obama administration has also included several significant tax fraud prevention proposals in its fiscal year 2014 budget, including limiting access to death records and omitting Social Security numbers on wage statements.

    “But there is still much more that can be done,” said Baucus. “We know tax fraudsters have easy access to taxpayers’ Social Security numbers through online databases, hospitals and other businesses that store personal information. We need tougher controls on access to private information, but it needs to be done efficiently without adding more paperwork to the process.”

    Baucus called for enabling the IRS to match a W-2 filed by an employer with a tax return before issuing a refund to help screen out fraudulent returns. “Right now, that is not happening,” he said. “We need to cut through the red tape and ensure this information gets to the IRS quickly.”

    Baucus said he is worried about reports from the National Taxpayer Advocate that it takes, on average, more than 180 days to close cases. “That is unacceptable,” he said. “The IRS needs to step it up and improve the way it handles tax ID theft once cases are identified. Victims of ID theft—people like Kipp Saile—are forced to put their lives on hold while their cases languish in red tape. The IRS needs to speed up prosecution through better communication with federal, state and local law enforcement.”

    You should read this entire story of the pain experiences Senator Orrin Hatches says Finance Committee staff aides have had with ID theft. After having to deal with the IRS, you would think they MIGHT have some sympathy to the plight of an American abroad, you think?

    and then there was this statement that bears noting by a representative from the American Institute of CPAs (AICPA) suggested a number of solutions to the problems of identity theft and tax fraud during the hearing.

    “Tax penalties should deter bad conduct without deterring good conduct or punishing the innocent,” he said. “Targeted, proportionate penalties that clearly articulate standards of behavior and are administered in an even-handed and reasonable manner encourage voluntary compliance with the tax laws. On the other hand, overbroad, vaguely defined and disproportionate penalties, particularly those administered as part of a system that automatically imposes penalties or that otherwise fails to provide basic due process safeguards, create a perception of unfairness that are likely to discourage voluntary compliance.”

    Of course, there are many additional problems too.
    IRS Has Trouble Stopping Tax Fraud by Prison Inmates

    Despite efforts by the Internal Revenue Service to prevent tax fraud by prison inmates, the problem has been growing with the amount of fraudulent tax returns filed by prisoners and identified by the IRS increasing from more than 18,000 in calendar year 2004 to more than 91,000 tax returns in 2010, with the refunds claimed on these returns climbing from $68 million to $757 million.

    A new report from the Treasury Inspector General for Tax Administration found that more improvements are needed to stop prisoner tax fraud.

  3. @ Yogagirl – You’ve finally figured out this obscene hypocrisy: The IRS is punishing overseas Americans because they can’t figure out how to secure THEIR OWN SYSTEM!!

    The Joint Committee on Taxation of Congress estimates that FATCA will yield only $800 million per year (if all Americans do exactly as they say), but the International Banking Association says it will cost banks in aggregate $20-30 billion to actually change all their systems. In the meantime, the IRS admits that it pays out over $20 billion in fraudulent refunds!

    So we are the excuse for their own incompetence and to divert the attention of Congress onto the false and puny issue of tax evasion overseas rather than have them institute internal FATCA rules on the IRS to make them find where that $20 billion is going!! They’re the ones who are sending it out after all!

    It then gets compounded where the IRS tells foreign governments that they will keep their data “secure” in these exchanges when their own data is made of Swiss cheese.

  4. Plato, Not at all surprised by the hypocrisy. The child tax credit is exploited by the working poor too as is the Earned Income Credit. “Shared” SSN’s and bogus ones is a long standing problem that neither the SSA or the IRS likes to talk about.

    But I really don’t see the IRS as much more than a tool the USG is using to try and regain control over its “off-shore” citizens. The USG sees us as Trojan Horses in other sovereign nations. We are footholds to be used to access information and excuses to force US law onto everyone. The money it sometimes brings in is just a bonus.

  5. Pingback: IRS Refunds 4 Billion Dollars a Year to Illegal Immigrants While Pursuing US Citizens Abroad | The Freedom Watch

  6. We shouldn’t worry our little brains about it, the TIGTA says everything is getting better…just a little bit more to do, and all solved!

    IRS Made Progress on Review of ITIN Applications

    The Internal Revenue Service has taken steps to correct problems with its oversight of applications for Individual Taxpayer Identification Numbers, or ITINs, but more improvements in the program are still needed, according to a new government report.

    The report, publicly released Thursday by the Treasury Inspector General for Tax Administration, found that the IRS is doing a better job of identifying questionable ITIN applications. TIGTA followed up on an earlier audit last year that found IRS supervisors encouraged employees to ignore potential fraud in the ITIN program, mainly from immigrants and their employers applying for the numbers (see IRS Discouraged Employees from Identifying Fraudulent ITIN Applications).

    “I am pleased that the IRS has made significant progress addressing seven of the nine deficiencies that TIGTA previously identified in the ITIN application program,” said TIGTA Inspector General J. Russell George in a statement. “Now, IRS officials need to address the remainder of our concerns.”

  7. @Just Me, Yoga Girl

    Well, this really sums up why doesn’t it:

    “It is important to recognize that the ITIN program is essential to the processing of tax returns that report tens of billions of dollars in taxable income, and billions of dollars of tax,” said Peggy Bogadi, commissioner of the IRS’s Wage and Investment Division, in response to the report. “At the same time, tax returns filed using ITINs may also claim certain tax benefits, and your report indicated several areas where our program needed to be improved to address potential compliance risk.”

    The IRS through its greed has created an unregulated guest worker program.

  10. @Just Me
    Don’t let a good tweet go wasted! Please tweet your edited version to your many followers, I have few!

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