IRS Failed to Send Child Tax Credit Payments to Millions of Households
WASHINGTON—The Internal Revenue Service sent $1.1 billion in advanced child tax credit payments during 2021 to people who shouldn’t have gotten them, and failed to send $3.7 billion to eligible households, according to an inspector general’s audit released on Tuesday.
The audit found 1.5 million taxpayers received the payments in error, and the IRS didn’t send payments to 4.1 million eligible households. Still, the agency was 98% accurate in sending more than 175 million child tax credit payments, made as part of the government’s response to the economic challenges of the coronavirus pandemic, the report by the Treasury Inspector General for Tax Administration said.
Congress expanded the child tax credit and authorized monthly payments in the March 2021 relief law signed by President Biden, giving a tax agency accustomed to annual refund payments an unprecedented test in administering monthly benefits.
The payments started that July and ended after December 2021, and Democrats haven’t been able to revive them. For the IRS, starting the monthly payments and helping households get them required an enormous information-technology and communications effort, and administration officials and lawmakers have generally praised the IRS’s work.
Some of the improper payments were made for children who were too old to be eligible or in cases where more than one taxpayer claimed the same child, the report said. In its response, the IRS said a computer programming error caused some of the problems and noted that it made changes during 2021 as the inspector general was identifying mistakes in real time.
Many people who received payments they shouldn’t have gotten were required to pay the money back on the 2021 tax returns they filed in early 2022.
Similarly, people who didn’t receive the advanced payments during 2021 could claim the full amounts they were eligible for on their tax returns, though the lack of payments may have affected them during 2021. This group included people with taxpayer identification numbers that are provided for people without Social Security numbers.
In the official IRS response to the report, the agency noted the high accuracy rates and highlighted its work in informing Americans about the credit through its website, telephone call centers, mail and in-person events.
The report is the latest analysis of the extraordinary government spending that happened during the pandemic. Last week, the Labor Department inspector general said unemployment-insurance fraud may have topped $45 billion.
Write to Richard Rubin at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
WASHINGTON—The Internal Revenue Service sent $1.1 billion in advanced child tax credit payments during 2021 to people who shouldn’t have gotten them, and failed to send $3.7 billion to eligible households, according to an inspector general’s audit released on Tuesday.
The audit found 1.5 million taxpayers received the payments in error, and the IRS didn’t send payments to 4.1 million eligible households. Still, the agency was 98% accurate in sending more than 175 million child tax credit payments, made as part of the government’s response to the economic challenges of the coronavirus pandemic, the report by the Treasury Inspector General for Tax Administration said.
Congress expanded the child tax credit and authorized monthly payments in the March 2021 relief law signed by President Biden, giving a tax agency accustomed to annual refund payments an unprecedented test in administering monthly benefits.
The payments started that July and ended after December 2021, and Democrats haven’t been able to revive them. For the IRS, starting the monthly payments and helping households get them required an enormous information-technology and communications effort, and administration officials and lawmakers have generally praised the IRS’s work.
Some of the improper payments were made for children who were too old to be eligible or in cases where more than one taxpayer claimed the same child, the report said. In its response, the IRS said a computer programming error caused some of the problems and noted that it made changes during 2021 as the inspector general was identifying mistakes in real time.
Many people who received payments they shouldn’t have gotten were required to pay the money back on the 2021 tax returns they filed in early 2022.
Similarly, people who didn’t receive the advanced payments during 2021 could claim the full amounts they were eligible for on their tax returns, though the lack of payments may have affected them during 2021. This group included people with taxpayer identification numbers that are provided for people without Social Security numbers.
In the official IRS response to the report, the agency noted the high accuracy rates and highlighted its work in informing Americans about the credit through its website, telephone call centers, mail and in-person events.
The report is the latest analysis of the extraordinary government spending that happened during the pandemic. Last week, the Labor Department inspector general said unemployment-insurance fraud may have topped $45 billion.
Write to Richard Rubin at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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