By Gemma Q. Casas
Variety News Staff

FINANCE Secretary Eloy Inos says the Internal Revenue Service is close to completing its investigation on the tax scam involving an undetermined number of foreign workers who managed to get tax refunds from the federal government although they are not entitled to it.
Inos said the CNMI has a separate tax system.
“Our position is that if they are CNMI residents, they should have filed here and not with the IRS,” said Inos in an interview yesterday.
Some foreign workers got tax refunds from the IRS through the federal government’s earned income tax credit, or EIC, a program that provides subsidies to low-income workers.
The CNMI’s decade-old minimum wage of $3.05 per hour is way below the federal rate of $5.15 which makes workers in the local private sector eligible for the EIC program — if they were eligible.
The foreign workers apparently filed the EIC claims through the Internet with the help of a “group” that knew about the federal program.
Foreign workers with children got larger checks.
Inos said his office does not know what the IRS will do with those who got the EIC tax refunds.
“The IRS is now looking into this practice. They are getting close to completing their investigation,” he said.
“Essentially, the EIC is not a program paid by the CNMI government so the local government did not lose any money. It’s the U.S. Internal Revenue Service — the U.S. Treasury (that incurred the losses),” he said.