The Internal Revenue Service let more than $100 million a year in tax breaks go to foreign citizens who have Social Security numbers but aren’t allowed to work and should not be claiming the credits, the agency’s inspector general said.
At issue are what’s known as nonwork Social Security numbers. More than 2 million of them have been issued to migrants who need them to access services or benefits but aren’t allowed to work, such as international students.
The IRS doesn’t have a systematic way of weeding them out when it processes tax returns that claim the Earned Income Tax Credit, the inspector general said.
The result was at least 67,000 tax returns with nonwork numbers that claimed the EITC in 2023 and 2024. They claimed nearly $219 million, and the IRS paid out nearly all of those claims — $213 million.
The IRS did block some claims that it checked manually, but the inspector general said it needs to find a way to use its “math error authority,” which can automatically correct tax returns, to block the erroneous claims.
Investigators said the Social Security Administration likely has the information the IRS needs, but it doesn’t share it.
Kenneth Corbin, chief of the IRS’ Taxpayer Services Division, said in a response to the report that the agency is aware of the issue.
“Having timely, updated, reliable eligibility information would enable immediate eligibility determinations and would avoid costly, resources intensive, post-filing determinations,” he said.
The EITC is a refundable tax credit intended to help the working poor. It’s a form of welfare that encourages them to remain working while collecting taxpayer-funded assistance.
But it’s plagued with errors, with a third of all claims paid out wrongly in 2025. That worked out to $21.1 billion, the IRS said.
Some are unintentional errors, but much is fraud.
The 2.4 million nonwork Social Security numbers fuel the confusion. Some of those people are eligible for the EITC, but others are not.
The SSA does provide a weekly report to the IRS of its list of Social Security number holders and applicants, but it doesn’t give enough information for the IRS to sort through which nonwork numbers are eligible for the tax credit.
The inspector general flagged the issue in 2017, urging the IRS to work with Social Security to get the right information. IRS officials said they explored the matter but couldn’t come up with a solution.
Investigators, in the new report, said they contacted Social Security and found the agency does track why a nonwork number was requested. The inspector general said if the SSA were to provide that information, it could help the IRS sort through its tax credit claims.
The inspector general said there’s also a data-sharing issue between the IRS and Homeland Security. Some nonwork number holders go on to become citizens or gain more firm work status — but DHS doesn’t alert Social Security or the tax agency.
That means even if the IRS had the SSA’s data, it still couldn’t assume numbers issued as nonwork Social Security numbers were ineligible.
