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IRS erred on child tax credit payments for millions of eligible families — but aid was 98% accurate overall, report finds

  • The IRS skipped advance child tax credit payments for 4.1 million eligible households in 2021 while sending payments in error to 1.5 million filers who didn’t qualify.
  • But the agency accurately issued 98% of the aid, according to the Treasury Inspector General for Tax Administration.
JGI/Tom Grill

The IRS skipped about $3.7 billion in advance child tax credit payments for 4.1 million eligible households, but sent more than $1.1 billion to 1.5 million filers who didn’t qualify in 2021, according to an audit released Tuesday by the Treasury Inspector General for Tax Administration.

However, the agency accurately issued 98% of the aid, the report found, based on a review of 178.9 million total payments made between July and November 2021. 

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Described as a “significant undertaking” by TIGTA, the monthly payments began in July 2021 after being enacted in March through the American Rescue Plan Act.

In an official response to the report, the IRS said it took corrective action in 2021 to block future payments to ineligible taxpayers and issued funds to millions of taxpayers who were erroneously excluded.

Taxpayers who wrongly received payments had children who were too old to qualify, or in some cases, were claimed on multiple tax returns, according to the IRS. The agency sent letters to assist with reconciliation and covered how to handle excess payments when filing 2021 tax returns on its FAQ page. 

However, some eligible filers still haven’t received the funds, former IRS commissioner John Koskinen said during a Bipartisan Policy Center panel on Monday.

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Source: Investing - personal finance - cnbc.com

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