On Saturday, Just the News posted an article about the Internal Revenue Service’s issuance of improper pandemic tax credits.
The article reports:
This week’s Golden Horseshoe is awarded to the IRS for issuing almost $1 billion in improper pandemic tax credits — and rebuffing an inspector general’s recommendations to recover the erroneous payments.
The tax collectors issued potentially $898 million in improper Recovery Rebate Credits (RRCs) to ineligible individuals, including potential nonresident aliens, according to a final audit report by the Treasury Inspector General for Tax Administration (TIGTA).
The CARES Act authorized Economic Impact Payments in varying amounts depending on income and filing status. Any eligible individual who did not receive the stimulus payment could claim the missing amount on their tax return as an RRC on their taxes in 2020 and 2021.
“As of May 27, 2021, the IRS had processed 26.3 million tax returns with RRC claims totaling $39.2 billion,” according to the TIGTA final audit report. “Of these, the IRS issued potentially improper RRC payments totaling $898 million. These include $79.8 million in the RRC that should have been paid to eligible individuals and $818.5 million in the RRC that was paid to ineligible individuals.”
The IRS declined to review or take steps to recover approximately two-thirds of the erroneously disbursed amounts, the inspector general revealed.
…Declining to review such ineligible claims processed after May 27, 2021, Corbin said the recovery effort “would require the IRS to divert limited resources to review these returns when such a small percentage, five one-hundredths of one percent, are projected to be affected by the issue.”
Democrats increased the IRS budget by 6% in the recent omnibus spending legislation, and an additional 10,000 agents were expected to be hired.
How much money would taxpayers save if the additional agents were put to work tracking down erroneous pandemic payments rather than harassing ordinary Americans who might have made an honest mistake on their tax returns?