IRS wastes
billions in bogus claims for Earned Income Tax Credit
The Internal Revenue Service paid up to $13.6 billion in bogus claims for the Earned Income Tax Credit last year and as much as $132.6 billion over the past decade, according to an internal audit that already has some members of Congress questioning how the agency will be able to administer Obamacare.
IRS problems with the tax credit aren’t new. In fact, the Treasury inspector general for tax administration said it warned officials about the problems in 2011 — but two years later, the agency still hasn’t solved the situation and remains in violation of one of President Obama’s executive orders.
Indeed, the IRS has not established annual targets for reducing the payments, which is required by law, nor is the agency complying with requirements that it report to auditors each quarter on any EITC payments totaling more than $5,000.
...21 percent to 25 percent of all EITC payments in 2012 were erroneous, meaning $11.6 billion to $13.6 billion was paid to people who shouldn’t have received the credit, or received the wrong amount.
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