“2011 is the year of finding every possible penny of revenue. As part of that effort, the House Ways and Means Oversight Subcommittee is today looking into refundable tax credit payments that shouldn't have been made.”
As Kay points out we are talking about the Additional Child Tax Credit, the American Opportunity Credit, the Earned Income Credit, the First-Time Home-Buyers Credit, and the Making Work Pay Credit. Reports by TIGTA (Treasury Inspector General for Tax Administration) and other agencies and organizations have proven that the administration of these credits has resulted in billions of fraudulent payments annually.
Kay quotes Republican Rep. Charles W. Boustany, Jr., chairman of the Oversight Subcommittee, as stating "Rampant abuse and misapplication of these credits has cost taxpayers an estimated $106 billion."
The biggest offender in the pack is the Earned Income Credit. Kay tells us -
“The Government Accountability Office reported that in 2010, the Earned Income Tax Credit was the fourth largest source for improper payments among all federal government programs, with an estimated $16.9 billion in improper payments.”
I have been saying for years, and had reiterating here last week, that, while the reasons behind some of these credits may be good, they should be taken out of the Tax Code and more properly administered as direct payments through the appropriate government agencies.
I look forward to reading more about this hearing – and will report back to you on it in future posts.