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New report: IRS is being ‘improper’

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According to a new report from the Treasury Inspector General for Tax Administration (TIGTA), the IRS has not been fully compliant with a federal law requiring it to eliminate and report improper government payments to taxpayers. (TIGTA Ref. No: 2012-40-028, March 2, 2012)

The Improper Pay­­ments Elimination and Recovery Act of 2010 increased accountability for reducing improper payments in all federal programs. TIGTA found that the only program the IRS has identified for im­­proper payment reporting is the Earned Income Tax Credit (EITC) Program. The IRS estimates that 21% to 26% of EITC payments were issued improperly in 2011, resulting in $13.7 to $16.7 billion in improper EITC payments. It now plans to establish EITC reduction targets and is exploring ways of computing an improper payment estimate for EITC underpayments.

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