Paul L. Caron

Tuesday, May 13, 2014

TIGTA: IRS Again Fails to Comply With Statutory Mandated Reduction in Improper Payments -- 26% EITC Fraud Costs $16 Billion/Year

TIGTA The Treasury Inspector General for Tax Administration today released The Internal Revenue Service Fiscal Year 2013 Improper Payment Reporting Continues to Not Comply With the Improper Payments Elimination and Recovery Act (2014-40-027):

The Improper Payments Elimination and Recovery Act (IPERA) of 2010 strengthened agency reporting requirements and redefined “significant improper payments” in Federal programs. The Office of Management and Budget has declared the Earned Income Tax Credit (EITC) Program a high-risk program that is subject to reporting in the Department of the Treasury Agency Financial Report. The IRS estimates that 22 to 26 percent of EITC payments were issued improperly in Fiscal Year 2013. The dollar value of these improper payments was estimated to be between $13.3 billion and $15.6 billion.

The IRS continues to not provide all required IPERA information to the Department of the Treasury for inclusion in the Department of the Treasury Agency Financial Report Fiscal Year 2013. For the third consecutive year, the IRS did not publish annual reduction targets or report an improper payment rate of less than 10 percent for the EITC. IRS management has indicated that the IRS and the Department of the Treasury are in continued discussions with the Office of Management and Budget to obtain its approval to develop supplemental measures that are appropriate to gauge the impact of EITC compliance and outreach efforts in lieu of developing error reduction targets. Finally, although risk assessments were performed for each of the programs that the Department of the Treasury required the IRS to assess, the risk assessment process still may not provide a valid assessment of improper payments in tax administration. As such, the EITC remains the only revenue program fund to be considered at high risk for improper payments.



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eliminate debit cards mail refunds to physical address not p.o. box

Posted by: mark bonner | May 13, 2014 11:51:15 AM

The response of the IRS is pathetic, in that it ignores the law and defers to "White House guidelines" (like guidelines to audit conservatives?) and wants to change the accounting rules to cover its failures.

From another article: "The IRS acknowledged it’s been slow to respond to the 2010 federal law requiring it to come up with a strategy to combat bad payments, but said it is making progress in meeting White House guidelines. IRS officials also disputed some of the way the inspector general calculated the bogus payments, saying they should be considered part of the 'tax gap,' rather than improper payments. The tax gap is the amount that taxpayers underpay to the IRS."

Posted by: Woody | May 13, 2014 11:01:29 AM