By Gemma Q. Casas
Variety News Staff

AN undetermined number of foreign workers have cashed checks amounting to tens of thousands of dollars in earned income credits, or EIC, although they are not entitled to the federal program.
The EIC claims were filed through the Internet or by using bogus addresses in the U.S.
The EIC, also known as the earned income tax credit, or EITC, is a federal program for families who earn low to moderate wages.
The islands’ hourly minimum wage of $3.05 an hour is 40 percent lower than the federal hourly wage rate of $5.15, and this makes most workers here eligible — if the federal EIC program actually applied here.
Press Secretary Charles P. Reyes Jr. said as far as he knows, CNMI-based workers are not entitled to the federal EIC.
The CNMI has its own tax system and does not pay federal taxes.
Some accountants interviewed by the Variety said the federal EIC does not apply here.
A CNMI official who asked not to be identified said a group of Internal Revenue Service agents has been sent to Saipan to investigate the tax scam and has asked the banks here to freeze the accounts of some individuals.
Reyes said it’s possible that the Attorney General’s Office’s assistance was sought.
At least one person who received an EIC check said a group of people in a certain company has been encouraging workers to process their EIC claims in exchange for a 10 percent commission.
Other “beneficiaries,” however, pay as much as a 30 percent commission because the persons that refer them to “the group” that files their EIC claims also get a percentage.
The federal government deposits EIC checks into the claimants’ bank accounts through wire transfer.
If the taxpayer does not have a bank account, “the group takes care of it.”
Variety was told that information about this EIC tax is now being disclosed because several workers were not given their money on time.
One of those who received an EIC check said she is willing to return the money.
“I am willing to return the EIC. But the thing is, the group already got their 30 percent commission from me,” she said.
“My concern is to stop this kind of scam and have that group take the responsibility for doing this. What do we know about tax computation? We’re just ordinary employees…it’s not just me who fell for this scam, there are many of us.”
On average, the workers who filed EIC claims online received $3,000 each.