Page 1 of 1

IRS paid more than $110B in improper tax credits

PostPosted: Tue Oct 22, 2013 9:19 pm
by Brandon

IRS paid more than $110B in improper tax credits


WASHINGTON (AP) — The Internal Revenue Service paid out more than $110 billion in tax credits over the past decade to people who didn't qualify for them, according to a Treasury report released Tuesday.

The Earned Income Tax Credits were intended for poor working families. In his report, IRS inspector general J. Russell George said more than one-fifth of all credits paid under the program went to people who didn't qualify.

"The IRS should be commended for implementing numerous processes to educate Americans and identify and prevent improper EITC payments," George said in a statement. "Unfortunately, it is still distributing more than $11 billion in improper EITC payments each year and that is disturbing."

"The IRS must do a better job of reining in improper payments in this and in other programs," George added.

IRS efforts are hampered by unscrupulous tax preparers as well as honest families that have trouble figuring out how to calculate the complicated credit, the report said.

"The IRS appreciates the inspector general's acknowledgement of all our work to implement processes that identify and prevent improper EITC payments," the IRS said in a statement. "Every year, the IRS conducts 500,000 EITC audits as part of a broader enforcement strategy, and EITC claims are twice as likely to be audited as other tax returns."

The agency said it prevents "nearly $4 billion in improper claims each year and is committed to continuing to work to reduce improper claims."

The EITC is one of the nation's largest anti-poverty programs. In 2011, more than 27 million families received nearly $62 billion in credits.

The credit is attractive because, if it is larger than your total income tax bill, the IRS will pay you the difference. This is especially helpful to low-income families because many pay little or no federal income tax.

It also makes the credit more susceptible to fraud.

"Refundable tax credits are a nightmare to administer and lead to far too much of the American people's money going out to those who aren't eligible," said Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee. "That the IRS can't figure out how to rein in the improper Earned Income Tax Credit payments doesn't bode well for the $1.1 trillion in ObamaCare subsidies."

Using IRS statistics, the inspector general's report provides an estimated range of improper EITC payments from 2003 through 2012. The report says the IRS paid out at least $110.8 billion in improper payments during the period, and perhaps as much as $132.6 billion.

The IRS says it is impossible to know the exact amount of improper EITC payments without auditing all 27 million taxpayers who received them, which isn't feasible.

The amount of improper payments ballooned during the recent economic slump, hitting at least $15.3 billion in 2010, the report said. For 2012, the improper payments totaled between $11.6 billion and $13.6 billion.

Families earn the credits by working and earning money, though there are income limits. The size of the credit depends on your income and the number of children you have.

This year, a married couple with three or more children can earn up to $51,567 and still qualify for the credit. A married couple with two children can earn up to $48,378 and still qualify, according to the IRS.

The maximum credit this year is $6,044 for families with three or more children. The maximum credit for families with two children is $5,372.



Great, not only is the government taking too much of our money, by force if necessary, but they also are giving it away to scammers, including billions to illegal aliens. Nice work.

time to end the slave tax(income tax)
time to end the IRS that attacked the American tax payer at the command of a politician

Should have spent less time targeting the Tea Party and more time auditing tax frauds, scamming the system for illegal EIC refunds. You know the food stamp crowd at it again.

This is why we need flat tax. The tax code is too complex and were loising revenue because of that.

"The IRS says it is impossible to know the exact amount of improper EITC payments without auditing all 27 million taxpayers who received them" ..... If it is impossible to know the exact amount of the fraud, how do they know how much HAS been paid out incorrectly?

I would also venture to guess that if the IRS had the time and resources to audit every single tax return of the upper 10% of all income receivers, the fraud of improper deductions and hidden income in illegal tax shelters and overseas accounts would far exceed the amount of improper EIC payouts.

Hmm, no mention of the illegal immigrants that bilked the US Taxpayers of billions of dollars using these tax credits.

Once again our entitlement nation rewards those who know how to work the system. Free phones, free food, free rent, free child care, free health care and free money.

And the IRS is going to be handling our Obamcare fines. Oh, that's so comforting to know.

The same IRS that is going to be in charge of fining us for non-compliance of the ACA. The same IRS that targets the Administration enemies. Yep. Like we are surprised at this.

Just ELIMINATE the damn credits - problem SOLVED. STOP giving free money to LOSERS.

typical...lets pay illegals...for the kids they have illegally here in the US....something HAS to change....I say lets have an open season on illegals....$100's time...

A $110 billion mistake and nobody will get fired.

How about the 42 Billion paid to ILLEGAL ALIENS, why does the press keep covering for this administration