Padilla Joins Cortez Masto, Wyden, Durbin in Demanding Trump Administration Abandon Proposed Plan to Strip Tax Credits from 700,000 Taxpayers

WASHINGTON, D.C. - U.S. Senator Alex Padilla (D-Calif.), Ranking Member of the Senate Judiciary Immigration Subcommittee, joined Senators Catherine Cortez Masto (D-Nev.), Ron Wyden (D-Ore.), and Dick Durbin (D-Ill.) in demanding the Trump Administration withdraw a proposed rule that would prevent up to 700,000 Deferred Action on Childhood Arrivals (DACA) and Temporary Protected Status (TPS) recipients and other tax-paying immigrants from claiming tax credits they are eligible for.

The Internal Revenue Service (IRS) and the Department of the Treasury are proposing a rule change that would prevent hundreds of thousands of taxpayers from claiming the Adoption Tax Credit, the American Opportunity Tax Credit, the Child Tax Credit, and the Earned Income Tax Credit. DACA and TPS recipients have been lawfully filing their taxes and claiming these credits for decades. In their letter to Treasury Secretary Scott Bessent and IRS CEO Frank Bisignano, the Senators expressed concern over the proposed rule.

"According to your own estimates, the proposed rule change could affect up to 700,000 taxpayers," wrote the Senators. "This would include more than 300,000 individuals living in households with a DACA recipient, two-thirds of whom are U.S. citizens and who have, on average, lived in the United States for over 28 years. The practical effect of these new regulations would be to deny tax credits to immigrants who are legally eligible for them and lawfully present in our country, and to create a byzantine and unworkable system for both tax preparers and taxpayers."

"The Administration has no legal authority to change congressionally enacted tax law via regulation…" the Senators continued. "Since the passage of PRWORA in 1996, no federal agency has interpreted refundable tax credits as federal public benefits restricted to qualified immigrants. If Congress intended for refundable tax credits to be treated as federal public benefits, it has had over 30 years to clarify the statute."

"The proposed rule is clear regulatory overreach that would have disastrous impacts for lawfully present immigrants and their families who are legally eligible for refundable tax credits," concluded the Senators.

In addition to Padilla, Cortez Masto, Wyden, and Durbin, the letter was signed by Senators Tammy Duckworth (D-Ill.), Ben Ray Luján (D-N.M.), Elizabeth Warren (D-Mass.), Michael Bennet (D-Colo.), and Patty Murray (D-Wash.)

Last year, during consideration of the "One Big Beautiful Bill Act," Padilla filed amendments related to restoring eligibility for the child tax credit to all taxpayers and to removing social security number requirements for various tax credits and benefits discussed in the letter. In July, Padilla and Cortez Masto led their colleagues in filing a bicameral amicus brief urging the U.S. Court of Appeals for the First Circuit to uphold a lower court's order blocking ICE from using - or even viewing - tens of thousands of taxpayers' addresses found to be illegally obtained from the IRS. Padilla and Durbin also sent a letter to Acting Attorney General Todd Blanche and Department of Homeland Security Secretary Markwayne Mullin urging them to halt improper $1.8 million fines on law-abiding immigrants. In June, Padilla and Durbin led over 50 colleagues in objecting to the Board of Immigration Appeals (BIA)'s recent decision to weaken legal protections for DACA recipients.

Full letter is available here.

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