[Congressional Record Volume 161, Number 40 (Tuesday, March 10, 2015)]
[Senate]
[Pages S1386-S1387]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Enzi, Mr. Crapo, Mr. Inhofe, 
        Mr. Perdue, Mr. Scott, Mr. Roberts, Mr. Isakson, Mr. Risch, Mr. 
        Boozman, Mr. Cornyn, and Mr. Johnson):
  S. 686. A bill to amend the Internal Revenue Code of 1986 to provide 
a limitation on certain aliens from claiming the earned income tax 
credit; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, today I am introducing legislation with 
Senator Enzi and a few other Senators to close a tax loophole that 
could mean billions of dollars in tax benefits going to individuals 
based on work they performed illegally in the United States.
  The tax benefit I am referring to is the earned-income tax credit. 
The earned-income tax credit was established as a work incentive to 
help move more individuals from the welfare rolls to the payrolls. The 
policy behind the EITC is one I and many of my colleagues support as it 
is intended to foster betterment and personal responsibility by giving 
those on the lowest rungs of the labor pool an extra incentive to jump 
in and stay in the workforce rather than rely on welfare programs.
  It does this by providing a tax benefit to low-income individuals 
based on the amount of earned income they have.
  The earned income tax credit is refundable, so it benefits even those 
who don't earn enough money to have a Federal income tax liability by 
providing them a cash payment.
  In 1996 Congress as a matter of policy determined that the earned 
income tax credit should be ``denied to individuals not authorized to 
be employed in the United States.'' That is the exact language used in 
the title of the relevant provision that was enacted in 1996. Congress 
carried this policy out by requiring those claiming the earned income 
tax credit to provide a Social Security number for themselves, their 
spouse, and their children.
  From a policy perspective, this rule made a lot of sense to me and 
many of my colleagues, as it passed both the House and the Senate with 
broad support. Obviously, if the object of the earned income tax credit 
is to encourage work, it makes no sense to provide such an incentive to 
those who are not legally allowed to work. Why would we want to 
encourage individuals to break our immigration laws?
  What Congress didn't know at the time was that at an unknown future 
date, a President, with the stroke of a pen, would essentially grant 
millions of undocumented workers amnesty. Under the President's action, 
those previously working illegally in the United States will be 
eligible for work authorization and a Social Security number.
  Based on an IRS interpretation of the earned income tax credit 
eligibility requirements, those who obtain a Social Security number 
will be eligible to claim the earned income tax credit not only for 
future years but for previous years while they were living and working 
in the United States undocumented. Based on the statute of limitations, 
those obtaining deferred action could then go back and amend or file 
returns for up to 3 previous tax years to take advantage of a credit 
that can be worth several thousands of dollars each year.
  The legislation I am introducing today with Senator Enzi will fix 
this loophole by making it clear that those granted deferred action are 
not eligible to claim the earned income tax credit for the years they 
worked in the United States as undocumented workers. This proposal is 
simply an extension of current policy. Those granted deferred action 
will still be able to claim the earned income tax credit in years going 
forward for work they perform legally. This proposal reflects the 
commonsense proposition that American taxpayers should not subsidize

[[Page S1387]]

work they performed illegally in the United States.
  This bill should be a no-brainer for any of my colleagues who agree 
that we should not reward individuals for breaking our immigration laws 
and our employment laws. I encourage my colleagues on both sides of the 
aisle to support this commonsense piece of legislation.
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