IRS Continues to Overpay Billions on the EITC

In accordance with Executive Order 13520, Reducing Improper Payments and Eliminating Waste in Federal Programs, Federal agencies are accountable for reducing improper payments while still providing access to beneficiaries.  The IRS estimates that the participation rate under the Earned Income Tax Credit (EITC) was nearly 80 percent, but this comes at a high cost.  A recent report indicates the error rate was 24 percent of the 60 million paid, or 14.5 billion, for Fiscal Year 2013.

The report was issued by the Treasury Inspector General for Tax Administration and further describes that the IRS is not in compliance with requirements of Executive Order 13520  by failing to establish annual improper payment reduction targets as required.  Instead, the IRS has obtained approval from the Office of Management and Budget to establish and report supplemental measures in lieu of annual reduction targets.

One of the most revealing disclosures in the report is that this error rate still represents an overall decline in the error rate since Fiscal Year 2003.

 

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