IRS wastes billions in bogus claims for Earned Income Tax Credit
By Stephen Dinan
The Washington Times
Tuesday, October 22, 2013

The Internal Revenue Service paid up to $13.6 billion in bogus claims for the Earned Income Tax Credit last year and as much as $132.6 billion over the past decade, according to an internal audit that already has some members of Congress questioning how the agency will be able to administer Obamacare.

IRS problems with the tax credit aren’t new. In fact, the Treasury inspector general for tax administration said it warned officials about the problems in 2011 — but two years later, the agency still hasn’t solved the situation and remains in violation of one of President Obama’s executive orders.

Indeed, the IRS has not established annual targets for reducing the payments, which is required by law, nor is the agency complying with requirements that it report to auditors each quarter on any EITC payments totaling more than $5,000.
. . . .
Mr. George and his investigators said 21 percent to 25 percent of all EITC payments in 2012 were erroneous, meaning $11.6 billion to $13.6 billion was paid to people who shouldn’t have received the credit, or received the wrong amount.

The EITC is a refundable tax credit designed to transfer money to the working poor through the tax system. It allows the working poor to pay less in taxes or, if they have no tax liability, to get money.

Both the IRS and the auditors agreed it is a complex program and checking eligibility is difficult.
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Read more: http://www.washingtontimes.com/news/2013.../#ixzz2iZILx7CI

Some Background on the abuse of EITC.
This information is not new. Many of the beneficiaries are illegal aliens and guest workers.

IRS doles billions in tax credits to “undocumented workers”
http://hotair.com/archives/2011/09/02/ir...mented-workers/

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The IRS says it doesn’t have the authority to disallow the claims. Apparently, the law doesn’t explicitly forbid unauthorized workers from claiming the tax credit, so the IRS just has to dole it out. And recent changes to tax law have made the refund even easier to obtain.

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Changes to tax law are partly to blame for the explosion in refunds for additional child tax credits in recent years, auditors found. Before 2001, filers needed to have three or more children to qualify — and to owe more Social Security taxes than earned income credits.

But those requirements have been eliminated and the allowable refund for each child doubled. The American Recovery and Reinvestment Act of 2009 also made the refund easier to get, auditors found

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NBC: Obama IRS refunds 'Illegals' $4.2 billion for kids--in Mexico
http://www.examiner.com/article/nbc-obam...for-kids-mexico

IRS Sent $46,378,040 in Refunds to 23,994 ‘Unauthorized’ Aliens at 1 Atlanta Address
http://cnsnews.com/news/article/irs-sent...h.UdDTQUxy.dpuf