IRS loses billions (again) to improper EITC payments
After reducing the amount of money wrongly paid out in Earned Income Tax Credit benefits in 2011 and 2012, internal investigators found the IRS lost ground last year, sending out over $13 billion in tax credits to people who may not have been qualified to receive those payments.
Already seen as a "high-risk" program, the Inspector General for the IRS found the tax agency "has made little improvement in reducing EITC improper payments" - and that's borne out by figures in today's report.
After improper EITC payments jumped to a minimum of $15.3 billion in Fiscal Year 2010, those numbers had dropped both in 2011 and 2010, down to a minimum of $11.6 billion.
But in 2013, it shot back up to between $13.3 billion and $15.6 billion, as between 22-26% of all payments were wrongly paid out.
Think about that statistic for a minute - it means about one of every four EITC payments should not be made.
Over the last ten years, investigators estimate the IRS has wrongly paid out around $115 billion - at a minimum - in EITC payments.
Here is a table of the last eleven years on improper EITC payments - the two percentage figures are the minimum and maximum for improper payments, and then the range of how much money was involved:
| 2003 | 25% | 30% | $9.5 | $11.5 |
| 2004 | 22% | 27% | $8.6 | $10.7 |
| 2005 | 23% | 28% | $9.6 | $11.4 |
| 2006 | 23% | 28% | $9.8 | $11.6 |
| 2007 | 23% | 28% | $10.4 | $12.3 |
| 2008 | 23% | 28% | $11.1 | $13.1 |
| 2009 | 23% | 28% | $11.2 | $13.3 |
| 2010 | 24% | 29% | $15.3 | $18.4 |
| 2011 | 21% | 26% | $13.7 | $16.7 |
| 2012 | 21% | 25% | $11.6 | $13.6 |
| 2013 | 22% | 26% | $13.3 | $15.6 |
Total up the figures for the last eleven years, and you get between $124.1 billion and $148.2 billion in improper payments on the EITC.
As you can also see from the table, the IRS has not been able to bring the rate of improper payments below 21% on the EITC.
