Senator presses IRS on improper tax credits

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Sen Tom Carper (D-Del.) is asking Internal Revenue Commissioner John Koskinen how the agency plans to reduce improper payments of a tax credit for low- and moderate-income people.

Congress expanded the Earned Income Tax Credit (EITC) in the tax package passed in December. The new law cemented reforms to the EITC that upped payments to those with three or more children and reduced penalties for married couples. 

{mosads}The law also established several “program integrity” measures aimed at reducing improper payments of the refundable credit. The Treasury Inspector General for Tax Administration has estimated that the improper payment rate is about 25 percent. 

“While these errors occur primarily because of the complexity of the credit’s rules and mostly reflect unintentional errors and not fraud, Congress and the Administration have a responsibility to take steps to reduce improper payments,” Carper, a member of the Senate Finance Committee, said in a letter dated Monday.

The Senator wants information about the IRS’s plans to implement the program integrity measures, given that IRS funding has fallen over the past several years.

“Ensuring that these program integrity measures are implemented effectively will require the Internal Revenue Service to devote significant resources to this effort, yet at the same time the funding provided by Congress to the Internal Revenue Service has declined precipitously,” Carper said.

Carper asked Koskinen to describe the IRS’ plans for implementing the new program integrity measures, including the timeframe and estimated cost. The senator also asked Koskinen to describe any additional human and information technology resources that are needed.

Additionally, Carper asked Koskinen to describe any additional efforts the IRS plans to take to reduce improper EITC payments. He asked if Koskinen thinks that the IRS needs any additional authority to carry out the mission.


Carper asked Koskinen to provide the requested information by May 2.

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