WASHINGTON – More than $10 billion a year in tax credits for low-income families go to people who don’t qualify for them, and the Internal Revenue Service isn’t doing enough to stop them, a government investigator said Wednesday.
Using IRS numbers, the investigator said about quarter of all earned income tax credits go to families that don’t meet the requirements.
The IRS has known about the improper payments for years but has not done enough to stop them, said J. Russell George, the Treasury inspector for tax administration. From 2003 to 2009, improper payments have totaled at least $70 billion, according to a report issued by George. In 2009, between $11.2 billion and $13.3 billion was improperly paid out.
“While the earned income tax credit helps many deserving Americans, it is well past time for the IRS to reduce the amount of improper payments in the program,” George said.
For many families, the credits are worth more than the federal income taxes they owe. They receive the excess in a payment.
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