On Tuesday, the Office of the Inspector General for Tax Administration announced that the IRS incorrectly distributed more than $1.1 billion in child tax credit payments in 2021.
According to the Daily Caller, the payments were sent to more than 1.5 million families between July and November 2021.
The audit also shows that 4.1 million taxpayers did not receive payments due them, and approximately $3.7 billion was wrongfully withheld by the IRS.
The report shows that a significant percentage of the $1.1 billion blunder pertained to errors related to processing payments for parents with children older than the eligibility threshold. The report notes, however, that errors in this category represent a “small proportion” of the 178.9 million payments made by the IRS.
The report also noted that the IRS incorrectly issued 6,829 reconciliation letters to taxpayers — this document was required to correctly process a 2021 tax return.
The report notes that some taxpayers did not receive a letter, while others received letters with incorrect financial information.
Additionally, the IRS inappropriately “changed 1,610 taxpayers’ bank account information used to receive direct deposits of the credit,” according to the Daily Caller.
Payments were made possible via a pandemic-era provision, the American Rescue Plan Act, established by President Joe Biden. The Act was Biden’s primary legislative response to the pandemic.
The Act increased the child tax credit by 60% and included a provision to claim up to 50% of the credit in advance.
The American Rescue Plan Act was endorsed by Biden because lockdowns were having a devastating impact on families and the economy.
The American Rescue Plan Act and the Paycheck Protection Program were designed to aid struggling families but were both roundly criticized at the time by Republican lawmakers.
Notably, no Republican in the House of Representatives voted for the legislation.
Today, Republicans are pointing to the Biden administration’s gross mismanagement of the pandemic and plan to increase the size of the IRS by 87,000 as reasons to vote Republican and wrest control of the House and Senate from the Democrats in the November midterms.
In June, Republican Rep. Jason Smith of Missouri, the ranking member of the House Budget Committee, said: “We have cataloged numerous examples of ridiculous waste of federal tax dollars from the American Rescue Plan.”
The Daily Caller noted that the IRS did not return their request for comment.
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