The Treasury Inspector General for Tax Administration just announced that the IRS is still making significant errors in payments of the Earned Income Tax Credit (EITC). Although there has been an overall decline in the improper payment rate since Fiscal Year 2003, the amount of payments made in error has increased from $10.5 billion in Fiscal Year 2003 to $14.5 billion in Fiscal Year 2013.
The TIGTA estimates that in Fiscal Year 2013, 24% of the EITC payments were paid in error. The TIGTA also noted that the IRS is not in compliance with certain requirements of Executive Order 13520 for Fiscal Year 2013 — it has not established annual improper payment reduction targets as required. However, the IRS is making some progress, having obtained approval from the Office of Management and Budget to establish and report supplemental measures in lieu of annual reduction targets.