Treasury estimates over $110.8 Billion in improper EITC payments

According to a Treasury Inspector General for Tax Administration (TIGTA) report, the IRS is not in compliance with an executive order requiring a reduction in the number of improper Earned Income Tax Credit (EITC) payments.

The TIGTA reported that an estimated 21%–25% of the EITC payments made in fiscal year 2012 were paid in error and that, between fiscal years 2003–2012, over $110.8 billion in improper EITC payments have been made.

Main factors cited in the report for the number of incorrect payments are the "complexity of the EITC program as well as the need to balance the reduction in improper payments while still encouraging individuals to use the credit." The report recommends that the IRS develop processes to identify improper payments of high-dollar amounts and report that information quarterly to the TIGTA. Report Number: 2013-40-084.