Undocumented immigrants living in the United States may be eligible for a tax return under President Obama's executive order granting Social Security numbers to some five million individuals.
The plan, which the President proposed last November, allows for work permits and temporarily staves off deportation for those brought before the age of 16. Because of their newly-received residency, immigrants can claim up to three years in back taxes, totaling roughly $1.7 billion over the next three years.
"The 2000 CCA [Chief Counsel advise) is correct. The CCA concludes that a taxpayer may claim the earned income tax credit (EITC) for a taxable year using a Social Security number (SSN) acquired in a later taxable years," IRS Commissioner John Koskinen wrote in a letter dated Feb. 25 to Sen. Charles Grassley (R- Iowa). Koskinen added, "[A] taxpayer claiming the EITC is not required to have an SSN before the close of the year for which the EITC is claimed."
Grassley is among a majority of Republicans calling the IRS's support a mockery of the law. In his rebuttal, the U.S. senator said he would push legislation that would overturn the policy.
"Given the IRS' interpretation of tax rules intended to prohibit undocumented workers from qualifying for the EITC, these individuals will be eligible to claim billions of dollars in tax benefits based on earnings from unauthorized work in the United States," Grassley said in a statement released Monday.
If approved, Obama's plan would not require undocumented immigrants to pay back-taxes. While immigrants have long been able to use a TIN, or alternative SSN, for refunds many others have paid taxes using numbers that don't belong to them. That, and child tax credit refunds, have GOP lawmakers scrutinizing the most recent provision.
A major roadblock in last week's impasse in funding the Department of Homeland Security was Democratic opposition to repealing Obama's actions. At a luncheon last Wednesday, Sen. Jeff Sessions (R- AL) argued the only way counter the bill would be to "prepare for an all-out battle with Democrats to ratchet up public pressure."
Proponents argue immigration reform will bring in new money, both from tax withholdings and payments into social security.
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