Illegal immigrants benefiting from billion-dollar tax loophole

Immigration may be among the most divisive topics in U.S. politics today. So when a reporter in Indiana uncovered a billion-dollar tax loophole that allowed illegal immigrants, who may not even be paying taxes, to get a 5-figure dollar amount in tax returns, more questions were raised than answered.

“We found, in many cases, they’re getting these tax credits for nieces and nephews and children who aren’t even in the United States,” explained Bob Segall with WTHR in Indianapolis.

Segall told 97.3 KIRO FM’s Dori Monson Show that in order to get the tax credit for dependents, illegal immigrants only need a letter from the school where the child attends, a birth certificate and a child’s photo.

It’s a loophole that the U.S. Treasury Inspector General has raised questions about since 2005, when the benefits being claimed were only in the millions. Last year, undocumented workers received approximately $4.2 billion from the government.

Why the increase?

The longer the tax credit has been available – the more people are discovering how to use it, and, in some cases abuse it. While you do need proof that there is a child eligible for dependency, they do not have to live in the United States.

Illegal immigrants, many of which are from Mexico – but not all, can provide a letter from a school in Mexico.

Segall said in one case, there were four undocumented workers living in the same mobile home. Between the four of them, they claimed 20 children as dependents, but while investigating the story, only one child was seen living at the home.

The loophole isn’t strictly abused, according to Segall. Over the course of his report he talked to immigrant families in which children were born in the U.S. and were even honor roll students at their schools. The money received from the government was going towards making those children’s lives more successful in the U.S.

Read Part I and Part II of Segall’s investigation.

Alyssa Kleven, MyNorthwest.com