In her September 14th ad "Best Friend," released in advance of the 2010 Senate election in Nevada, Republican Sharron Angle criticized her Democratic opponent Harry Reid's voting record, claiming he "votes to give special tax breaks to illegal aliens." After carefully considering the evidence and fact-checking the case on both sides, as well as our own findings, we have adjusted our initial verdict to declare this statement "Mostly False." Angle's claim seems deliberately oversimplified to make a more shocking sound byte. The ad claims that Reid's voting record supports "special tax breaks to illegal aliens" without citing any specific evidence. When asked, the Angle campaign refers to several votes by Reid to support this claim. Most do not target illegal aliens, and one, on an amendment offered by Reid himself, explicitly contradicts Angle's implications. Reid voted against one amendment early in debate that provides Angle's claim with its one shred of truth, but we find it deliberately misleading to construe Reid's vote the way she did in this ad.

In question are Reid's votes on amendments to the 2006 and 2007 comprehensive immigration bills. These bills were both designed to provide a path to citizenship for millions of people who came to the United States without legal status. The bills lay out a step-by-step process for immigrants to become legal residents, which would qualify them to receive the Earned Income Tax Credit. A debate emerged over whether illegal immigrants who received probationary Z visas under this process would thus become eligible for this credit. FactCheck.org pointed us to this report from the Heritage Foundation, which explains that, under the law as proposed, "all individuals in probationary Z visa status will be given lawful Social Security numbers, which makes the Z visa holder immediately eligible for... the EITC." Consequently, two Republican senators introduced amendments to ensure that this status would not permit illegal immigrants to receive the tax credit.

Reid did indeed vote against one amendment that would prohibit illegal immigrants from receiving the Earned Income Tax Credit: Amendment 4108, offered by Senator Jeff Sessions, Republican from Alabama. Here is the passage from this amendment on page S4974, which addresses illegal immigrants' eligibility for the Earned Income Tax Credit:

On page 364, line 22, after ``an'' insert the following: ``alien who is unlawfully present in the United States, or an alien receiving adjustment of status under section 408(h) of this Act who was illegally present in the United States prior to January 7, 2004, section 601 of this Act, or section 613(c) of this Act, shall not be eligible for the Earned Income Tax Credit. With respect to benefits other than the Earned Income Tax Credit, an alien''.

This passage addresses immigrants receiving legal status due to adjustments made in the immigration reform bill, as both PolitiFact and FactCheck.org point out, but it also covers any "alien who is unlawfully present in the United States." It seems to us that PolitiFact and FactCheck.org found this language redundant, because they both treat this amendment as though it only affects the people "receiving adjustment" to legal status under the proposed immigration bill. We feel that the first clause addressing any "alien who is unlawfully present in the United States" is deliberate, and that it lends the only plausible argument in favor of Angle's claims about Reid's vote.

NewsTrust Host Neil Anderson found a thorough report by Edwin S. Rubenstein entitled "The Earned Income Tax Credit and Illegal Immigration," which outlines many flaws and loopholes in the Earned Income Tax Credit and other social welfare programs. According to the government statistics cited in this report, illegal immigrants are able to receive benefits from the EITC through various means, many of them fraudulent, but some of them technically legal. Rubenstein argues that this tax credit is particularly susceptible to such fraud, compared to other social welfare programs. Still, even Rubenstein concedes that "technically, EITC is available only to people with valid Social Security numbers." The ways people get around that requirement are varied, but they result from IRS policies exploiting legal loopholes, and they are not at issue in the debates over the 2006/2007 immigration bills. Though Reid did vote against it, Sessions amendment is, at best, an effort to close a loophole in one law with another loophole in a separate law. Ultimately, that was one technical point in a long amendment, which Reid joined the majority of his colleagues in opposing, anyway.

Reid voted against another amendment, offered on May 25, 2006 by his Republican colleague John Ensign from Nevada, which would prevent people receiving adjustment to legal status under the immigration bill from getting retroactive tax credits from years prior to 2006. This is even less plausibly a point for Angle's claim, as this amendment targets people who, upon passage of the bill, would be legal residents of the United States. The best spin Angle could put on this vote would be to call those affected "former illegal aliens," but only people who would receive legal status under the bill would be affected, not current illegal immigrants.

Finally, in a later debate on the stalled immigration reform bill, Reid himself introduced an amendment to clarify his opposition to allowing illegal immigrants to receive the Earned Income Tax Credit. His amendment explicitly states that "Nothing in this Act, or the amendments made by this Act, may be construed to modify any provision of the Internal Revenue Code of 1986 which prohibits illegal aliens from qualifying for the earned income tax credit under section 32 of such Code." Section 32 of the Internal Revenue Code states:

(D) Limitation on eligibility of nonresident aliens The term "eligible individual" shall not include any individual who is a nonresident alien individual for any portion of the taxable year unless such individual is treated for such taxable year as a resident of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. (These sections lay out the various exceptions for legal alien status) (E) Identification number requirement No credit shall be allowed under this section to an eligible individual who does not include on the return of tax for the taxable year- (i) such individual's taxpayer identification number, and (ii) if the individual is married (within the meaning of section 7703), the taxpayer identification number of such individual's spouse.
...
(m) Identification numbers Solely for purposes of subsections (c)(1)(E) and (c)(3)(D), a taxpayer identification number means a social security number issued to an individual by the Social Security Administration (other than a social security number issued pursuant to clause (II) (or that portion of clause (III) that relates to clause (II)) of section 205(c)(2)(B)(i) of the Social Security Act).
(all emphasized sections added)

As pointed out in the Rubenstein article, there are loopholes in the application of the tax code, which enable some illegal immigrants to receive tax credits. The problem, according to Rubenstein, is that the IRS has begun issuing Income Taxpayer Identification Numbers that are not Social Security Numbers to illegal immigrants, in order to get them to pay taxes on their income. They don't report these activities to the INS or the Department of Homeland Security. Unfortunately, the Center for Budget and Policy Priorities report cited by Rubenstein for this information is no longer available online for verification, but we don't think it matters for the purposes of fact-checking Angle's quote. This constitutes the exploitation of a legal loophole by the IRS, which is not at issue in the debate over the immigration reform bills of 2006 and 2007.

Sessions' amendment does not address these creative IRS tactics, and there is no indication that his language would do anything to address them. Reid's own amendment upholds an interpretation of the Internal Revenue Code that "prohibits illegal aliens from qualifying for the earned income tax credit under section 32 of such Code," which defines a Taxpayer Identification Number as a Social Security Number. We concede it is possible that Reid is knowingly overlooking the loophole used by the IRS to exploit this provision, but we have seen no evidence to suggest that is the case. Due to the ambiguities and apparent loopholes allowing some illegal aliens to collect tax credits, we cannot say for certain that Angle's claim is definitively false. However, we feel that Reid's voting record on the immigration reform bills of 2006 and 2007 does not demonstrate support for "special tax breaks to illegal aliens."

-- By Jon Mitchell, on behalf of NewsTrust Editors
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In her September 14th ad "Best Friend," released in advance of the 2010 Senate election in Nevada, Republican Sharron Angle criticized her Democratic opponent Harry Reid's voting record, claiming he "votes to give special tax breaks to illegal aliens." After carefully considering the evidence and fact-checking the case on both sides, as well as our own findings, we have adjusted our initial verdict to declare this statement "Mostly False." Angle's claim seems deliberately oversimplified to make a more shocking sound byte. The ad claims that Reid's voting record supports "special tax breaks to illegal aliens" without citing any specific evidence. When asked, the Angle campaign refers to several votes by Reid to support this claim. Most do not target illegal aliens, and one, on an amendment offered by Reid himself, explicitly contradicts Angle's implications. Reid voted against one amendment early in debate that provides Angle's claim with its one shred of truth, but we find it deliberately misleading to construe Reid's vote the way she did in this ad.

In question are Reid's votes on amendments to the 2006 and 2007 comprehensive immigration bills. These bills were both designed to provide a path to citizenship for millions of people who came to the United States without legal status. The bills lay out a step-by-step process for immigrants to become legal residents, which would qualify them to receive the Earned Income Tax Credit. A debate emerged over whether illegal immigrants who received probationary Z visas under this process would thus become eligible for this credit. FactCheck.org pointed us to this report from the Heritage Foundation, which explains that, under the law as proposed, "all individuals in probationary Z visa status will be given lawful Social Security numbers, which makes the Z visa holder immediately eligible for... the EITC." Consequently, two Republican senators introduced amendments to ensure that this status would not permit illegal immigrants to receive the tax credit.

Reid did indeed vote against one amendment that would prohibit illegal immigrants from receiving the Earned Income Tax Credit: Amendment 4108, offered by Senator Jeff Sessions, Republican from Alabama. Here is the passage from this amendment on page S4974, which addresses illegal immigrants' eligibility for the Earned Income Tax Credit:

On page 364, line 22, after ``an'' insert the following: ``alien who is unlawfully present in the United States, or an alien receiving adjustment of status under section 408(h) of this Act who was illegally present in the United States prior to January 7, 2004, section 601 of this Act, or section 613(c) of this Act, shall not be eligible for the Earned Income Tax Credit. With respect to benefits other than the Earned Income Tax Credit, an alien''.

This passage addresses immigrants receiving legal status due to adjustments made in the immigration reform bill, as both PolitiFact and FactCheck.org point out, but it also covers any "alien who is unlawfully present in the United States." It seems to us that PolitiFact and FactCheck.org found this language redundant, because they both treat this amendment as though it only affects the people "receiving adjustment" to legal status under the proposed immigration bill. We feel that the first clause addressing any "alien who is unlawfully present in the United States" is deliberate, and that it lends the only plausible argument in favor of Angle's claims about Reid's vote.

NewsTrust Host Neil Anderson found a thorough report by Edwin S. Rubenstein entitled "The Earned Income Tax Credit and Illegal Immigration," which outlines many flaws and loopholes in the Earned Income Tax Credit and other social welfare programs. According to the government statistics cited in this report, illegal immigrants are able to receive benefits from the EITC through various means, many of them fraudulent, but some of them technically legal. Rubenstein argues that this tax credit is particularly susceptible to such fraud, compared to other social welfare programs. Still, even Rubenstein concedes that "technically, EITC is available only to people with valid Social Security numbers." The ways people get around that requirement are varied, but they result from IRS policies exploiting legal loopholes, and they are not at issue in the debates over the 2006/2007 immigration bills. Though Reid did vote against it, Sessions amendment is, at best, an effort to close a loophole in one law with another loophole in a separate law. Ultimately, that was one technical point in a long amendment, which Reid joined the majority of his colleagues in opposing, anyway.

Reid voted against another amendment, offered on May 25, 2006 by his Republican colleague John Ensign from Nevada, which would prevent people receiving adjustment to legal status under the immigration bill from getting retroactive tax credits from years prior to 2006. This is even less plausibly a point for Angle's claim, as this amendment targets people who, upon passage of the bill, would be legal residents of the United States. The best spin Angle could put on this vote would be to call those affected "former illegal aliens," but only people who would receive legal status under the bill would be affected, not current illegal immigrants.

Finally, in a later debate on the stalled immigration reform bill, Reid himself introduced an amendment to clarify his opposition to allowing illegal immigrants to receive the Earned Income Tax Credit. His amendment explicitly states that "Nothing in this Act, or the amendments made by this Act, may be construed to modify any provision of the Internal Revenue Code of 1986 which prohibits illegal aliens from qualifying for the earned income tax credit under section 32 of such Code." Section 32 of the Internal Revenue Code states:

(D) Limitation on eligibility of nonresident aliens The term "eligible individual" shall not include any individual who is a nonresident alien individual for any portion of the taxable year unless such individual is treated for such taxable year as a resident of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. (These sections lay out the various exceptions for legal alien status) (E) Identification number requirement No credit shall be allowed under this section to an eligible individual who does not include on the return of tax for the taxable year- (i) such individual's taxpayer identification number, and (ii) if the individual is married (within the meaning of section 7703), the taxpayer identification number of such individual's spouse.
...
(m) Identification numbers Solely for purposes of subsections (c)(1)(E) and (c)(3)(D), a taxpayer identification number means a social security number issued to an individual by the Social Security Administration (other than a social security number issued pursuant to clause (II) (or that portion of clause (III) that relates to clause (II)) of section 205(c)(2)(B)(i) of the Social Security Act).
(all emphasized sections added)

As pointed out in the Rubenstein article, there are loopholes in the application of the tax code, which enable some illegal immigrants to receive tax credits. The problem, according to Rubenstein, is that the IRS has begun issuing Income Taxpayer Identification Numbers that are not Social Security Numbers to illegal immigrants, in order to get them to pay taxes on their income. They don't report these activities to the INS or the Department of Homeland Security. Unfortunately, the Center for Budget and Policy Priorities report cited by Rubenstein for this information is no longer available online for verification, but we don't think it matters for the purposes of fact-checking Angle's quote. This constitutes the exploitation of a legal loophole by the IRS, which is not at issue in the debate over the immigration reform bills of 2006 and 2007.

Sessions' amendment does not address these creative IRS tactics, and there is no indication that his language would do anything to address them. Reid's own amendment upholds an interpretation of the Internal Revenue Code that "prohibits illegal aliens from qualifying for the earned income tax credit under section 32 of such Code," which defines a Taxpayer Identification Number as a Social Security Number. We concede it is possible that Reid is knowingly overlooking the loophole used by the IRS to exploit this provision, but we have seen no evidence to suggest that is the case. Due to the ambiguities and apparent loopholes allowing some illegal aliens to collect tax credits, we cannot say for certain that Angle's claim is definitively false. However, we feel that Reid's voting record on the immigration reform bills of 2006 and 2007 does not demonstrate support for "special tax breaks to illegal aliens."

-- By Jon Mitchell, on behalf of NewsTrust Editors