GOP to Attack Immigration Order Through Taxes

USA Today

By Brian J. Tumulty

March 20, 2015

GOP to attack immigration order through taxes

Republicans in Congress have found a new strategy to undermine President Obama's executive order protecting about 4 million undocumented immigrants from deportation.

They want to prevent those immigrants from becoming retroactively eligible to claim the Earned Income Tax Credit.

Their legislation would save the government $2.1 billion, according to the non-partisan Joint Committee on Taxation.

The GOP strategy highlights its arguments that Obama's executive order, issued in November, will impose a serious financial burden on federal, state and local governments.

But the lead author of the bill in the Senate said the measure "is not meant to be part of the immigration debate.''

"It's just part of correcting what the president has put in place when he legalized people through his November action,'' said Sen. Charles Grassley, R-Iowa.

A similar bill in the House, the No Free Rides Act, authored by Rep. Patrick McHenry, R-N.C., has 12 co-sponsors, all Republicans.

Obama's order would allow the undocumented immigrants covered by his executive order to receive Social Security cards needed to file tax returns.

That's a problem, co-sponsors of the legislation say, because the Internal Revenue Service allows people who recently received a Social Security number to file amended returns claiming the Earned Income Tax Credit for up to three prior years. That interpretation of tax law dates back to 2000.

The Earned Income Tax Credit is a refundable credit claimed by low- to moderate-income working people. Grassley's office estimates the average credit in 2012 was just over $2,300 and the maximum available credit in 2014 is $6,143.

The median annual salary of undocumented four-member immigrant families was about $40,578 last year, according to Daniel Costa, director of immigration law and policy research for the liberal-leaning Economic Policy Institute. They would qualify for an EITC of about $2,000, he estimated.

Several Senate Democrats said they would need to give the legislation a closer look.

"It's a complex issue, and I don't think it's easy to state one hard-and-fast rule,'' Sen. Richard Durbin, D-Ill., said.

Sen. Chuck Schumer, D-N.Y., said, "The answer to our immigration problems is a clean immigration bill. Very few benefits go to anybody before they become a citizen.''

Treasury officials say it would be difficult for immigrants covered by Obama's order to file amended tax returns for past years, or new returns for those years.

"Filing original returns for prior years would likely be difficult, since filers would have to reconstruct earnings and other records for years when they were not able to work on the books,'' Treasury spokeswoman Erin Donar said in an e-mail. "In addition, in order to claim the EITC, these households would need to report income, which may result in them owing taxes.''

Most families eligible for the tax credit qualify for only "a small fraction'' of the maximum amount, Donar said.

For more information, go to:  www.beverlyhillsimmigrationlaw.com