VA woman admits $7.2 million child-credit tax scam.
By Kenric Ward | Watchdog.org Virginia Bureau
More than a year after Watchdog reported the IRS sent thousands refunds to the tiny town of Parksley, Va., a woman has pleaded guilty to conspiracy and mail fraud.
Linda Avila admitted to obtaining more than $7.2 million in refunds by exploiting the federal government’s child tax credit program.
Avila filed more than 1,700 tax returns with stolen identifications used by illegal immigrants, mainly from Mexico.
The Virginian-Pilot reported that Avila, 50, operated a landscaping and cleaning business in Parksley.
Investigators found copies of refund checks in amounts from $4,000 to more than $7,000. The tax returns frequently cited foreign dependents, which increased the refund amounts.
Avila had the refunds mailed to various post office boxes on the Eastern Shore and in Delaware, according to court records.
The workers cashed the checks and turned over most of the money to Avila, keeping a small fee for themselves.
Avila, who remains free pending sentencing in U.S. District Court on Feb. 17, could not be reached for comment.
Avila’s case is just the tip of the iceberg.
Sen. Charles Grassley, R-Iowa, said the IRS mailed $4.2 billion in child-credit checks to undocumented immigrants around the country. He accused the tax agency of misconstruing Congress’ intent that only U.S. citizens would be eligible for the child credit.
J. Russell George, Treasury inspector general for tax administration, estimated last May the IRS allowed more than $13 billion in tax credits through a related earned-income program.
Watchdog reported in June 2013 that disbursements via the Additional Child Tax Credit program have grown rapidly with the IRS’ increased issuance of Individual Taxpayer Identification Numbers as substitutes for Social Security numbers.
ITIN holders are not required to prove legal residency, and ITIN applications are running at the rate of 1 million a year.
Under the Obama administration’s new, loosened immigration rules, holding a Social Security card or an ITIN number would become a distinction without a difference.
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