TIGTA: IRS Paid $21 Billion In Improper Tax Credits In 2024

Treasury Inspector General for Tax Administration, Assessment of Fiscal Year 2024 Compliance With Improper Payment Reporting Requirements (No. 2025-400-025) (May 9, 2025):

For FY 2024, the IRS partially complied with the reporting requirements contained in the Payment Integrity Information Act (PIIA). As in prior years, the IRS calculated improper payment rates for the following four high-risk programs: Additional Child Tax Credit (ACTC), American Opportunity Tax Credit (AOTC), Earned Income Tax Credit (EITC), and Net Premium Tax Credit (PTC). However, the IRS still has not satisfied the goal to reduce improper payment rates to less than 10 percent, with the total amount of improper payments totaling $21.4 billion.

We made three recommendations in this report, including that the IRS request additional legislative considerations to help reduce improper payments and analyze the impact of the new processing procedures for returns claiming duplicate dependents. The IRS agreed with all three recommendations.

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