Senators press IRS for answers on tax credits, unauthorized workers

The audit, the lawmakers wrote to Doug Shulman, the IRS commissioner, and Treasury Secretary Timothy Geithner, raised “serious concerns about which we are requesting further information and that require the immediate attention of the Department of the Treasury and the IRS.”

Sen. Orrin Hatch (R-Utah), the ranking member at Finance, first raised concerns about the report from the Treasury Department’s inspector general for tax administration a week ago.

Sen. Max Baucus of Montana, who chairs the Finance panel, was the only Democrat to join the 11 GOP members of the committee on the letter.

{mosads}Sen. Claire McCaskill (D-Mo.) also is pushing the IRS for answers on the issue.

The audit found that workers with ITINs were putting in for the child tax credit at a much faster clip in recent years, with those taxpayers claiming $924 billion worth of the ACTC in 2005.

The IRS has said that it will consult with Treasury on whether unauthorized workers can claim the credit. But agency representatives have stressed that, under current law, it believes workers can claim the credit no matter what their work authorization status.

Taxpayers with ITINs cannot claim the Earned Income Tax Credit and tax benefits because of legislation passed during the Clinton administration. But the ACTC was enacted after those bills became law.  

In their letter, the senators ask the IRS and Treasury to respond by Sept. 21.