The IRS Is Wasting Your Money in Improper Payments

The IRS Is Wasting Your Money in Improper Payments by The Elephant's Child

December 13, 2014, 7:20 pm
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Law, Regulation, Taxes | Tags: IRS Improper Payments, The Corruption of Bureaucracy, Why Nothing Ever Changes

The Internal Revenue Service continues its outstanding record of honesty and competence. A new report from the Treasury Inspector General for Tax Administration has revealed that “nearly a quarter of the $63 billion worth of Earned Income Tax Credits distributed in 2012 were improper payments.”

In 2010, Congress passed a bill called the Improper Payments Elimination and Recovery Act of 2010. They convened a hearing to investigate the progress or lack thereof. Some of the agency witnesses tried to convince the committee that at least modest progress was being made, but the GOP members weren’t buying it. They were looking at five years of over $100 billion in improper payments. This was at a hearing in July, 2014.

“Excuse me for getting a little bit intense about this,” said Republican Congressman John Mica, waiving a piece of paper in the air.“They are astounding figures,” said Mica. “You could balance the federal budget just by correcting some of these very significant amounts of money that are going out the door unchecked.”

Improper payments include overpayments to people or vendors, spending without sufficient documentation, or simply, checks sent to the wrong people (or even dead people). According to the GAO, the five programs with the highest dollar amounts accounted for nearly 90 percent of the payments. And Fiscal Year 2013 isn’t an anomaly. “It’s been over $100 billion for the last five years in a row,” said Mica.

The Earned Income Tax Credit (EITC) has routinely been flagged as a high-risk area with lax oversight that will probably put billions of tax dollars in the wrong hands. Amounts are likely to rise because of  President Obama’s executive order on Immigration. Up to 5 million people might qualify.

The problem with Big Government is not simply bigness, it’s the layering on of bureaucracy. A law is passed, often in general terms, and turned over to federal agencies to fill out the details and determine the regulations required to carry out the requirements of the law.  Congress simply doesn’t want to be bothered with the details. When it doesn’t work as they assumed it would — and laws seldom do because they attempt to direct the actions of 310 million cantankerous individual people who are not a large, cooperative band of sheep — they just layer on another law or more regulations to fix it. And so government expands, getting ever bigger and ever less efficient. On top of that, layer government unions which mean that nobody can get fired, and nobody is responsible and corruption grows.

A  new New York Times survey shows that 54 percent of Americans say “over-regulation” that may interfere with economic growth was a bigger problem than lack of regulation. Only 54 percent? They said that they were more concerned about damage caused by excessive government regulation than by inequality caused by the economic system — a response surely troubling to Democrats who are deeply concerned about inequality and sure that more and more regulation will fix everything.

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