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Report: IRS Wasted $11B+ Issuing 'Improper Funds


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The Internal Revenue Service in 2012 issued more than $11 billion in "improper payments" made through the Earned Income Tax Credit program, the Washington Post reports, citing a recent inspector general’s report.

Yes, that's an 11 followed by nine zeroes.

“Treasury Department deputy inspector general Michael McKenney found that the IRS has failed to comply for two consecutive years with the Improper Payments Elimination Act,” the report states, “which President Obama signed in 2010. The law requires federal agencies to reduce erroneous payments to a rate of less than 10 percent.”

At least 21 percent of EITC payments last year were faulty, according to the IRS's conservative estimates.

“That rate showed a decline compared to the previous nine years, but improper payments over the same period increased about 22 percent, rising to at least $11.6 billion, according to the inspector general’s report,” the WaPo explains.

The IG’s takeaway? The IRS “has made little improvement in reducing EITC improper payments.”

“The Earned Income Tax Credit awards tax refunds to many low-income individuals and families, especially those who have children,” the WaPo report adds.

Many factors contribute to EITC errors, including tax law, the number of people who are eligible for the credit, and the credit itself, the IRS explained.

“The reduction of improper payments is a top priority for the IRS, and we are making progress in this area,” the agency said in a statement on Tuesday. “We will continue to work hard to get the credit to those who are eligible while protecting against improper payments.”

Here’s the full IG report:


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