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Phillips  \nDeputy Inspector General for Audit  \nSUBJECT: Final Audit Report – The Earned Income Tax Credit Program Has  \nMade Advances; However, Alternatives to Traditional Compliance Methods Are Needed to Stop Billions of Dollars in Erroneous Payments (Audit \\# 200740029)  \nThis report presents the results of our review to assess the Internal Revenue Service’s (IRS) progress in improving administration of the Earned Income Tax Credit (EITC) Program since Fiscal Year 2003. Our review included assessing oversight of the Program and efforts taken to improve compliance with and participation in the Program. This review was part of the Treasury Inspector General for Tax Administration Fiscal Year 2007 Annual Audit Plan and relates to the Fiscal Year 2007 Major Management Challenge of addressing erroneous and improper payments.  \nImpact on the Taxpayer  \nThe IRS has implemented a number of initiatives designed to 1) educate taxpayers on the EITC requirements and assist them in determining EITC eligibility, 2) provide information and guidance to tax preparers, and 3) improve its examination processes to reduce burden on taxpayers. In addition, the IRS has successfully developed a number of processes to identify erroneous EITC payments prior to issuance. However, because compliance resources are limited and alternatives to traditional compliance methods have not been developed, the majority of the potentially erroneous EITC claims identified continue to be paid in error. The IRS reports $10 billion to $12 billion annually in erroneous EITC payments.  \n| | The Earned Income Tax Credit Program Has Made Advances; However, Alternatives to Traditional Compliance Methods Are Needed to Stop Billions of Dollars in Erroneous Payments |\n| --- | --- |\n| Response\u003Cbr>IRS management agreed with all of our recommendations. The IRS will continue its ongoing efforts to identify new alternatives to effectively expand its treatment of EITC errors while protecting taxpayer rights and minimizing taxpayer burden. As part of these efforts, management will conduct a study of Federal Case Registry information to determine its accuracy and applicability for exercising existing math error authority to deny the EITC during upfront processing of the tax return. The IRS will communicate any relevant results from its study to the Assistant Secretary of the Treasury for Tax Policy for his or her consideration. Management’s complete response to the draft report is included as Appendix VI.\u003Cbr>Copies of this report are also being sent to the IRS managers affected by the report recommendations. Please contact me at (202) 622-6510 if you have questions or\u003Cbr>Michael E. McKenney, Assistant Inspector General for Audit (Returns Processing and Account Services), at (202) 622-5916.\u003Cbr>4 |  |\n\nThe Earned Income Tax Credit Program Has Made Advances; However, Alternatives to Traditional Compliance Methods Are Needed to Stop Bill","cbCaitnTXyKB5drF","https://ap.wps.com/l/cbCaitnTXyKB5drF","pdf",874476,"English","# Background\n# Results of Review\n## Although Some Improvements Have Been Made in the Administration of the Earned Income Tax Credit Program, a Process to Measure Progress in Meeting Program Goals Is Still Needed\n## Alternatives to Traditional Compliance Methods Are Needed to Reduce the Billions of Dollars in Identified Erroneous Earned Income Tax Credit Payments\n# Recommendation 1\n# Recommendation 2\n# Appendices\n## Appendix I – Detailed Objective, Scope, and Methodology\n## Appendix II – Major Contributors to This Report\n## Appendix III – Report Distribution List\n## Appendix IV – Prior Audit Report Recommendations\n## Appendix V – Glossary of Terms\n## Appendix VI – Management’s Response to the Draft Report","[{\"question\":\"What was the purpose of the audit review?\",\"answer\":\"To assess IRS progress in improving administration of the Earned Income Tax Credit (EITC) program since Fiscal Year 2003, including oversight and efforts to improve compliance with and participation in the program.\"},{\"question\":\"What initiatives has the IRS implemented to reduce EITC errors?\",\"answer\":\"The IRS has focused on educating taxpayers on EITC requirements, assisting eligibility determinations, providing guidance to tax preparers, and improving examination processes to reduce taxpayer burden. It has also developed processes to identify erroneous EITC payments prior to issuance.\"},{\"question\":\"Why do erroneous EITC payments continue despite improvements?\",\"answer\":\"The report states that because compliance resources are limited and alternatives to traditional compliance methods have not been developed, most potentially erroneous EITC claims continue to be paid in error, with IRS reporting $10 billion to $12 billion annually.\"}]","The Earned Income Tax Credit Program Has Made Advances - However, Alternatives to Traditional Compliance Methods Are Needed to Stop Billions of Dollars in Erroneous Payments | PDF",1789794133]