Messer, Ferguson Urge Child Credit Restrictions for Tax Reform

October 4, 2017

Chairman Kevin Brady
House Ways and Means Committee
1102 Longworth House Office Building
Washington, DC 20515

Chairman Orrin Hatch
Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Brady and Chairman Hatch:

We write to you to urge you to eliminate loopholes in the tax reform package that allow illegal immigrants to claim the Child Tax Credit (CTC) and the Additional Child Tax Credit (ACTC). As you know, these credits were created by the Taxpayer Relief Act of 1997 to help ease the financial burden that families incur when they have children. The credits allow taxpayers to reduce their federal income tax liability by up to $1,000 per child. If the value of the credit exceeds the amount of tax a family owes, the family may be eligible to receive a full or partial refund of the difference.

The Internal Revenue Service (IRS) does not require individuals to have a Social Security Number (SSN) that is valid for work in order to be eligible to claim the CTC or the ACTC on their tax returns. Therefore, any individual who files a tax return with an Individual Taxpayer Identification Number (ITIN) may be eligible to claim the credit.¹ The IRS issues ITINs to individuals “regardless of immigration status, because both resident and nonresident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code.”²

The IRS has rated the ACTC as low risk for significant improper payments; however, in 2014, the Treasury Office of Inspector General for Tax Administration found that the “ACTC improper payment rate for Fiscal Year 2013 is between 25.2 percent and 30.5 percent, with potential ACTC improper payments totaling between $5.9 billion and $7.1 billion.”³

There has been legislation introduced in Congress (H.R. 2817 — the Child Tax Credit Integrity Preservation Act and H.R. 1919 — the Child Tax Credit Protection Act of 2017) that would prohibit individuals from claiming the CTC and ACTC who do not have a SSN. President Trump also included a similar proposal in his 2017 budget submission to Congress. We urge you to include this type of provision in the tax reform package to reduce improper payments and protect U.S. taxpayers. Savings generated by this provision could be used to increase the Child Tax Credit for law-abiding American families, as the tax reform plan proposes.

Thank you for your attention to this request.

Sincerely,

Luke Messer
Member of Congress

Drew Ferguson
Member of Congress