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Democrats scoff at GOP's fraud concerns over expansion of child tax credit

"I'm more concerned about tax fraud at the highest end among corporations and the 1%," said New York Democratic Rep. Ritchie Torres.

Updated: May 9, 2021 - 10:26pm

The Facts Inside Our Reporter’s Notebook

Republican lawmakers have raised fraud concerns about the expanded child tax credit, but New York Democratic Rep. Ritchie Torres said he's "more concerned about tax fraud" among the nation's wealthiest 1%.

Torres joined House Appropriations Committee Chair Rosa DeLauro and Washington Democratic Rep. Suzan DelBene to advocate for making the expanded child tax credit in President Biden's $1.9 trillion American Rescue Plan permanent.

In 2012, the Treasury Department inspector general reported that illegal immigrants had received "billions of dollars in tax credits for children who don't live in America" as a result of child tax credit fraud. 

In 2014, it was reported that almost $6 billion in fraud and "false payments" was connected to the child tax credit for fiscal year 2013 alone.

The Democratic lawmakers were asked if they share the GOP concerns about the potential for more fraud and false payments with a permanent expansion of the credit.

"I'm more concerned about tax fraud at the highest end among corporations and the 1%," said Torres. "I mean, here's a staggering statistic: The IRS is more likely, is 50% more likely, to audit those earning $50,000 or less than those earning $1 million dollars or more. So the enforcement priorities of the IRS have been radically misplaced. So I've seen no evidence that expanding the CTC or expanding the EITC would lead to tax fraud."

DelBene, a member of the tax-writing Ways and Means Committee, said the IRS needs more federal assistance above the $400 million that was provided in the American Rescue Plan to carry out the expansion of the child tax credit and earned income tax credit.

"The Biden administration has said, too, we have not provided the IRS the resources they need to do their work," said DelBene, "and so this is another area that's incredibly important, to make sure the IRS has the resources, not only for technology and the upgrades there, but also for their ongoing enforcement efforts."

Torres said he would be open to a bipartisan effort to provide additional funding for the IRS.

"Maybe there should be a bipartisan commitment to bolstering the resources of the IRS, if there's a widespread concern about tax fraud," he said. "The IRS has fewer than 10,000 auditors. The last time the IRS was that under-resourced was the 1950s. So if Republicans are so concerned about tax fraud as that they want to join us in bolstering the resources and modernizing the infrastructure of the IRS, I certainly welcome that bipartisanship."