A recent report from the Treasury Inspector General for Tax Administration (TIGTA) has revealed that the Internal Revenue Service improperly paid out nearly $15 billion in Earned Income Tax Credit (EITC) payments for fiscal year 2013 — a chunk representing almost one-fourth of the total EITC payments made for that same year.
The September report, which was made public last week, also found the IRS had improperly paid out at least $5.9 billion (and possibly as much as $7.1 billion) in Additional Child Tax Credits (ACTC) for FY 2013.
The TIGTA report estimates $14.5 billion of the total $63 billion in Earned Income payments was made in error. However, the agency’s greater problem lies in figuring out a way to curb the systemic shortcomings that continue to allow excessive and improper payments of the Additional Child credits.
“Processes have been developed to identify improper EITC payments and their root causes,” the TIGTA report states. “However, the IRS has not developed processes to quantify or identify the root causes of improper ACTC payments.
“The IRS has continually rated the risk of improper ACTC payments as low. However, TIGTA’s assessment of the potential for ACTC improper payments indicates the ACTC improper payment rate is similar to that of the EITC…
“Significant changes in IRS compliance processes would be necessary to make any significant reduction in improper payments.”
Elsewhere, the report asserts that the tax enforcement agency hasn’t “developed a strategy to identify the root causes of ACTC improper payments.”
Last year, a TIGTA report revealed the IRS had essentially lost $67 million in funds supposedly marked for the implementation of Obamacare.
Last month, another TIGTA report found the agency continues to be lax in enforcing its own policy concerning employees who maintain outside employment and avoiding conflicts of interest.