Isakson, Perdue: Tax Code Shouldn’t Reward Those Who Broke Immigration Laws

WASHINGTON, D.C. – U.S. Senators Johnny Isakson (R-GA) and David Perdue (R-GA) today co-sponsored legislation to prevent millions of individuals benefitting from the president’s 2014 executive amnesty action from collecting a tax credit based on work performed while in this country illegally.

The president’s action last year to grant amnesty to millions here illegally also opened the door for those individuals to be eligible for the Earned Income Tax Credit, which helps low- to moderate-income workers. The legislation co-sponsored by Isakson and Perdue would prohibit those here illegally from being eligible for the Earned Income Tax Credit.

“To reward individuals who are in this country illegally, and to do so with hardworking taxpayers’ dollars, is incomprehensible and unacceptable,” said Senator Isakson, a member of the Senate Committee on Finance with jurisdiction over tax policy and the Internal Revenue Service (IRS). “Yet millions of individuals benefiting from the president’s unconstitutional executive amnesty could become eligible to claim a tax credit based on a questionable interpretation of tax rules by the IRS. I will continue to do all that I can to stop this executive immigration overreach and will fight to prevent the IRS from doling out hundreds of millions of taxpayer dollars to those who broke our immigration laws.”

“President Obama’s illegal executive amnesty has many negative consequences, and this tax loophole is one of them,” said Senator Perdue. “I urge my Senate colleagues to stop the President’s unconstitutional actions, and preventing these benefits from going to those who broke our immigration laws and were granted amnesty is an important step."

This bill is intended to close a loophole created by an IRS interpretation that has the effect of allowing those receiving deferred immigration action to qualify for a credit they were previously denied or otherwise ineligible for at the time. It is consistent with policy put in place in 1996 intended to deny the credit to those not authorized to work in the United States.

This legislation would prohibit individuals receiving deferred action from claiming the Earned Income Tax Credit unless they were eligible to claim the credit for the year in question and were authorized to be employed in the United States for the entire taxable year. This prohibition would apply to the year in which they are granted deferred action and to all their previous tax returns.

To help the IRS administer the requirement, the legislation requires the Department of Homeland Security to share necessary information with the Social Security Administration so that it will be able to establish Social Security number identifiers that would alert the IRS to those who have received deferred action.

The legislation was introduced by Sen. Chuck Grassley (R-IA) and was co-sponsored by Isakson and Perdue along with Senators Mike Enzi (R-WY), Mike Crapo (R-ID), Jim nhofe (R-OK), Tim Scott (R-SC), Pat Roberts (R-KS), James Risch (R-ID), and John Boozman (R-AR).