TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Friday, March 23, 2012

TIGTA: IRS 21%-26% Error Rate Results in $14-$17 Billion/Year in Erroneous EITC Payments

TIGTA The Treasury Inspector General for Tax Administration yesterday released The IRS Is Not in Compliance With All Improper Payments Elimination and Recovery Act Requirements (2012-40-028):

The IRS estimates that 21 to 26 percent of EITC payments were issued improperly in Fiscal Year 2011. This equates to $13.7 billion to $16.7 billion in EITC improper payments.

http://taxprof.typepad.com/taxprof_blog/2012/03/tigta-irs-pays-.html

IRS News, Tax | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef01630329a0f6970d

Listed below are links to weblogs that reference TIGTA: IRS 21%-26% Error Rate Results in $14-$17 Billion/Year in Erroneous EITC Payments:

Comments

And yet if the Congress were to try and appropriate, say, an extra $2 billion to the IRS to stop the fraud and mistakes, and have a net positive impact of $10-12 billion Republicans would refuse to do so, citing the need to cut government spending.

Posted by: David R | Mar 23, 2012 7:20:28 AM

A better idea would just be to phase out the EITC. Handing out "free" money is a fraud magnet.

Posted by: masstexodus | Mar 23, 2012 11:55:34 AM

The IRS is much more interested in collecting taxes from the 50% who pay taxes. A 20% error in wealth redistribution through possible fraud will have low priority because it serves the distribute the wealth cause. And we all know that fairness requires those who work to give up their money to those who don't.

Posted by: Jill Farrar | Mar 23, 2012 11:56:49 AM

David,
If Congress were to cut the budget somewhere to the tune of $2 billion and use that for the IRS to cut down on fraud in Washinton DC and the rest of the country, most consevatives would applaud. President Obama did hire thousands of new auditors, and there is still a massive error rate. They are looking in the wrong places for fraud and corruption.

Posted by: tyree | Mar 23, 2012 11:58:50 AM

and rightly so. IRS could find their own net ten billion without spending another tax dollar. why not make the bureaucrats at IRS earn their own keep for a change?

Posted by: Donald | Mar 23, 2012 12:00:48 PM

No, what would happen is that the IRS would spend the $2 billion, and we would see the same exact rate of $13.7 billion to $16.7 billion lost anyway. Of course, the $2 billion would go to some outside efficiency expert firm that would be politically connected to someone in Congress......

Posted by: Mike | Mar 23, 2012 12:08:26 PM

The first comment was perfect liberal nonsense.

If the IRS spent less resources on trying to punish Obama's and the Democrat's political enemies, maybe more resources would be available. But no, the problem has to be that the GOVERNMENT IS NOT BIG ENOUGH!

Plus, ten "equal opportunity" unmotivated and unskilled workers are not going to have a lower error rate that five such employees. It's quality, not quantity that really counts.

Posted by: GaryS | Mar 23, 2012 12:14:46 PM

Gee, David - how about we just expect the IRS to be competent?
Why is the answer always 'give them more money'?
That's the type of poor thinking that keeps screwing us.

Posted by: Pete the Streak | Mar 23, 2012 12:19:31 PM

And yet if the Congress were to try and appropriate, say, a flat tax rate to stop the fraud and mistakes, and have a net positive impact of say $only God knows at this point Democrats would refuse to do so, citing the need to increase taxes and spending.

Posted by: CL | Mar 23, 2012 12:34:48 PM