The Internal Revenue Service (IRS) sent over $1.1 billion in child tax credit payments to incorrect recipients during the COVID-19 pandemic, according to an audit by the Department of the Treasury’s Inspector General (IG) for Tax Administration on Tuesday.
The IRS sent the payments to 1.5 million people between July and November of 2021 during the pandemic, according to the audit’s report. Additionally, the IG noted that 4.1 million taxpayers did not receive payments they should have, amounting to $3.7 billion withheld.
The incorrect payments were made to recipients whose dependent children, required to claim the credit, did not meet the age requirements (i.e., under 18 years old), were deceased, or had been claimed on another filer’s return. These were a small proportion of the 178.9 million child tax credit payments made during the period, totaling $76.7 billion.
Additionally, the report noted that the IRS incorrectly sent out 6,829 reconciliation letters to taxpayers who received the credit, a document required to prepare their 2021 tax returns. Some taxpayers never received the letter, while others received letters with incorrect amounts.- READ MORE