Accounting
Improper payment rate still too high at IRS
The Internal Revenue Service has not yet satisfied the goal of the Payment Integrity Information Act to reduce improper payment rates to less than 10%, according to a new report.
The
In accordance with the Payment Integrity Information Act of 2019, TIGTA has to annually assess and report on improper payment requirements and determine whether the IRS complained with them. The IRS calculated improper payment estimates for four programs that were considered to be high risk because they have improper payments exceeding $100 million annually.
The four programs and their improper payment rates are:
- Net Premium Tax Credit (29%);
- American Opportunity Tax Credit (28%);
- Earned Income Tax Credit (27%); and,
- Additional Child Tax Credit (11%).
The Treasury Department attributed the causes behind the errors to factors such as the complexity of the eligibility rules, inability to verify taxpayer-provided information prior to issuing refunds, lack of correctable error authority, and a requirement to issue refunds within 45 days.
“For example, when there are taxpayers who claim the same dependent, the IRS cannot determine which taxpayer is eligible at the time a tax return is filed, and the IRS must process both claims and complete post-filing activities such as issuing notices or conducting audits to determine eligibility,” said the report.
For the 2025 filing season, the IRS made a change in its Identity Protection PIN process that will accept electronically filed individual tax returns when a dependent has already been claimed on another return to reduce the burden on taxpayers and issue their refunds timely. But there was minimal impact of the duplicate dependent condition on total improper payments.
The IRS isn’t reporting improper payment rates for pandemic-related programs because they believe it would be an inefficient use of resources given the short-term nature of pandemic programs, according to the report, though the IRS is continuing to assess risks for pandemic-related programs, such as the Employee Retention Credit.
TIGTA made three recommendations in the report, suggesting the IRS should request additional legislative considerations to help reduce improper payments and analyze the impact of the new processing procedures for returns claiming duplicate dependents. The IRS agreed with all three of TIGTA’s recommendations.
“The refundable tax credit (RTC) programs examined in this report are designed to provide critical financial support to eligible taxpayers,” wrote IRS CFO Teresa Hunter in response to the report. “The IRS is committed to administering these programs effectively, ensuring that eligible taxpayers receive the credits to which they are entitled while maintaining program integrity and compliance with improper payment reporting requirements.”
She argued that the RTC errors are not a result of internal control weaknesses within the IRS’s processes, but the complexity of the eligibility requirements and the IRS’s reliance on taxpayer self-certification of accurate RTC claims put them outside the traditional improper payment framework.
Total postsecondary spring enrollment grew 3.2% year-over-year, according to a report.
The National Student Clearinghouse Research Center published the latest edition of its
The report found that undergraduate enrollment grew 3.5% and reached 15.3 million students, but remains below pre-pandemic levels (378,000 less students). Graduate enrollment also increased to 7.2%, higher than in 2020 (209,000 more students).
(Read more:
Community colleges saw the largest growth in enrollment (5.4%), and enrollment increased for all undergraduate credential types. Bachelor’s and associate programs grew 2.1% and 6.3%, respectively, but remain below pre-pandemic levels.
Most ethnoracial groups saw increases in enrollment this spring, with Black and multiracial undergraduate students seeing the largest growth (10.3% and 8.5%, respectively). The number of undergraduate students in their twenties also increased. Enrollment of students between the ages of 21 and 24 grew 3.2%, and enrollment for students between 25 and 29 grew 5.9%.
For the third consecutive year, high vocational public two-years had substantial growth in enrollment, increasing 11.7% from 2023 to 2024. Enrollment at these trade-focused institutions have increased nearly 20% since pre-pandemic levels.
Jordan Vonderhaar/Photographer: Jordan Vonderhaar/
The Internal Revenue Service has released
The Inflation Reduction Act of 2022 amended Sec. 55 to impose the CAMT based on the “adjusted financial statement income” of an “applicable corporation” for taxable years beginning in 2023.
Among other details, proposed regs provide that “applicable corporation” means any corporation (other than an S corp, a regulated investment company or a REIT) that meets either of two average annual AFSI tests depending on financial statement net operating losses for three taxable years and whether the corporation is a member of a foreign-parented multinational group.
Prior to the publication of any final regulations relating to the CAMT, the Treasury and the IRS will issue a notice of proposed rulemaking. Notice 2025-27 will be in IRB: 2025-26, dated June 23.
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