The Treasury Inspector General for Tax Administration has released a report saying that nearly 1/4 of Earned Income Credit claims are false, costing billions of dollars in improperly paid refunds. The report doesn’t sound optimistic about this trend stopping any time soon:
The IRS has made little improvement in reducing EITC improper payments since being required to report estimates of these payments to Congress in 2002. Based on our review of the IRS report provided in response to Executive Order 13520, we believe there is a high risk the IRS will continue to pay billions of dollars in EITC improper payments annually. The IRS continues to report that 23 percent to 28 percent of EITC payments are issued improperly each year. In FY 2009, this equated to $11 billion to $13 billion in EITC improper payments.
Those of you interested in some “light reading” can find the entire report here.