Any taxpayer that has faced an IRS audit or tax dispute knows exactly how “nitpicky” the IRS can be. Heaven forbid you failed to account for a dollar claimed as a tax deduction, or forgot to record two dollars of income. In fact, the IRS won’t hesitate to assess penalties and interest for even the smallest oversight.
Any taxpayer that has faced an IRS audit or tax dispute knows exactly how “nitpicky” the IRS can be. Heaven forbid you failed to account for a dollar claimed as a tax deduction, or forgot to record two dollars of income. In fact, the IRS won’t hesitate to assess penalties and interest for even the smallest oversight.
That’s why it’s so ironic to see that the IRS often does a poor job of accounting for its own funds. Recently, it was disclosed that the IRS mistakenly awarded over $13 billion in tax credits. That’s billion, with a ‘B’!
A CNN article reports:
The U.S. government doled out more than $13 billion last year in improper payments of a tax credit meant to help the working poor, according to a government watchdog. One of the country’s largest cash assistance programs, the so-called Earned Income Tax Credit (EITC) allows low-income workers to lower their tax bill by as much as $6,000, which in many cases prompts a significant refund check.
But the Internal Revenue Service estimates that around a quarter of all payments made for the tax credit in the 2013 fiscal year were issued improperly — resulting in anywhere from $13.3 billion to $15.6 billion in faulty payments, according to a report released by the Treasury Inspector General for Tax Administration (TIGTA).
While the IRS has long acknowledged that the tax credit is a major source of fraud, the TIGTA report found that the agency has made “little progress” in reducing the mistaken payments.
It’s certainly ironic that the IRS will penalize taxpayers for failing to account for even the smallest amount of money – while simultaneously giving away over $13 billion dollars of public money by mistake.
But ironic or not, it’s the way things work – and bringing this subject up with an IRS auditor isn’t going to help matters! If you find yourself facing an IRS dispute, we can help. We’ll deal with the IRS so that you don’t have to, and we’ll work hard to obtain the best possible settlement so that you can get on with your life!