The IRS’s handling of advance payments of the child tax credit to taxpayers last year is the subject of a new study from the Treasury Inspector General for Tax Administration (TIGTA), which contains both good news and negative news.
The Good & Bad News of The Child Tax Credit
First, the good news: According to TIGTA’s audit, which was carried out to evaluate IRS processes and practices to help ensure that child tax credit raise regular payments were precise and made to only those taxpayers who qualified, the IRS correctly sent over 175.6 million payments to recipients between July and November 2021, totaling about $75.6 billion.
The bad news is that TIGTA also discovered that 1.5 million taxpayers received 3.3 million payments totaling over $1.1 billion who were not entitled to them. In addition, the IRS failed to deliver 4.1 million eligible individuals 8.3 million payments totaling nearly $3.7 billion.
Eligible Families And Individuals
The child tax credit was increased by the American Rescue Plan Act of 2021, which was regarded by Congress and put into effect on March 11, 2021. Additionally, it authorized monthly payments of varying amounts to eligible families and individuals based on their adjusted gross incomes and, if they have children, the age of their children.
Even though the IRS made mistakes, TIGTA commended the tax authority for quickly preparing for this “major undertaking”. TIGTA reported that there were cases when a dependent did not satisfy the age standards, was dead or was listed on another tax return of the taxpayers who mistakenly got early child tax credit payments.
TIGTA claimed that it applied the same methodology to find taxpayers who were entitled to an early child tax credit payout but had not yet received one from the IRS. TIGTA reported that it “immediately alerted IRS management to determine the cause of the nonpayment and verify that action(s) was taken to issue payments to eligible taxpayers” for the July and August 2021 payments. The IRS noted its 98% accuracy record during the brief timeframe given in its official statement to TIGTA’s conclusions.
The American Rescue Plan was huge for Pennsylvania.
1) 2.4 Million kids got Child Tax Credit.
2) 250k Pennsylvanians received rental assistance.
3) $1.3 billion helped stabilize child care providers.We have more to do, but this one bill is still making an impact. pic.twitter.com/BkZTdfaVqJ
— Rep. Malcolm Kenyatta (@malcolmkenyatta) September 29, 2022
Real-time Study & Issue Identification
The TIGTA audit personnel “offered near real-time analysis & issue recognition at frequent & regular intervals,” according to the IRS, with whom it closely collaborated. Numerous recipients of payments they shouldn’t have received had to repay the funds on the 2021 returns on the tax they submitted in early 2022.
Similarly, even if the lack of remittances may have had an impact on them during 2021, persons who did not get the advance payments during that year could still collect the full amount they were entitled to on their tax returns. People have taxpayer identification numbers, which are given to those without Social Security reports CPAPracticeAdvisor.
