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IRS IG – The Internal Revenue Service Is Not in Compliance With All Improper Payments Elimination and Recovery Act Requirements

The Internal Revenue Service Is Not in Compliance With All Improper Payments Elimination and Recovery Act Requirements, March 2, 2012 Reference Number: 2012-40-028

  • “The methodology the IRS uses to estimate the EITC [Earned Income Tax Credit] improper payment rate results in a reasonable estimate of EITC overclaims. However, the IRS did not comply with all of the improper payment requirements included in the Improper Payments Elimination and Recovery Act. The Department of the Treasury identifies the programs for which the IRS must assess the risk of improper payments. The IRS compiles the required information and forwards it to the Department of the Treasury for inclusion in the Department’s agency financial report. Our analysis of the information the IRS provided to the Department of the Treasury showed that the IRS is not in compliance with all Improper Payments Elimination and Recovery Act requirements. The IRS has not established annual EITC improper payment reduction targets and has not computed a gross estimate of EITC improper payments as the estimate does not include underpayments. An underpayment results when an EITC payment is made in an amount less than what an individual is entitled to receive.”
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