For 30 years, the IRS has been mailing cash payments to people the federal government already deemed ineligible for public benefits. It happened as a matter of deliberate policy. Nearly one million illegal immigrants per year, collecting refundable tax credits that a 1996 law explicitly said they weren't supposed to have.

On Wednesday, that stopped.

Treasury Secretary Scott Bessent and IRS Commissioner Frank J. Bisignano announced proposed regulations blocking illegal immigrants from claiming the refundable portions of four major tax credits: the Earned Income Tax Credit, the Child Tax Credit, the Adoption Credit, and the American Opportunity Credit. The projected savings to taxpayers: $3 billion.

The key word is "refundable." Most tax credits reduce what you owe. Refundable credits go further — if the credit exceeds your tax liability, the government sends you the difference. That's the part that's been going to nearly one million illegal immigrants filing with Individual Taxpayer Identification Numbers: not just a reduced tax bill, but an actual check from the Treasury. The new rules require filers to declare their legal eligibility under penalty of perjury, restricting refundable payouts to U.S. citizens, U.S. nationals, and qualified aliens.

"Under President Trump, the days of illegal aliens collecting taxpayer-funded benefits are over," Bessent said. "The federal law is clear, and Treasury is enforcing it."

That last part is worth slowing down for. The law Bessent is referencing has been on the books since 1996 — the Personal Responsibility and Work Opportunity Reconciliation Act, signed by Bill Clinton — which already barred illegal immigrants from receiving federal public benefits. The Treasury Department is now proposing regulations to apply and clarify what that 30-year-old statute actually means for the tax code.

The only question worth asking is why it took three decades and five administrations for someone to enforce a law that was already on the books.

"Refundable tax credits, like the Earned Income Tax Credit, were enacted to help low-to-middle income American families and workers receive critical financial support," Bisignano said. "Today's proposed regulations ensure that federally funded benefits are reserved for eligible taxpayers and protect the integrity of every taxpayer dollar."

Bessent put it more bluntly: "American taxpayers should not be forced to foot the bill for benefits going to those who are barred by law from receiving them."

The administration tied the move to a February 2025 executive order directing federal agencies to stop extending benefits to populations Congress had already excluded. The IRS, apparently, needed the reminder.

Nearly one million recipients who weren't legally eligible. A law from 1996 that five presidents left unenforced. Three billion dollars.

Call it what it is: a policy choice somebody made by doing nothing for thirty years.