Washington, DC - Congressman Charles W. Boustany, Jr., MD, (R-LA), Chairman of the Subcommittee on Oversight of the Committee on Ways and Means, announced that the Subcommittee will hold a hearing on improper tax payments in the administration of refundable tax credits.  The hearing will take place on Wednesday, May 25, 2011, in Room 1100 of the Longworth House Office Building, beginning at 10:30 A.M.

In announcing the hearing, Chairman Boustany said, “At a time of record level federal deficits, the last thing the government can afford is to be hemorrhaging tens of billions of dollars in improper payments.  The Subcommittee needs to understand the current levels of waste, fraud, and abuse and what can be done to prevent billions of dollars of improper payments each year.”

BACKGROUND:

While some tax credits reduce a taxpayer’s liability to zero, refundable credits can also result in a taxpayer receiving money from the government even if they have paid no taxes.  In recent years, the number and dollar amount of improper payments arising from refundable tax credits has been increasing at an alarming pace.  Over the last few years, the rampant abuse and misapplication of these credits has cost taxpayers an estimated $106 billion.

Despite this alarming abuse of taxpayer dollars, the Treasury Inspector General for Tax Administration has noted that the IRS has made little progress in reducing improper payments since being required to report these figures to Congress and the Office of Management and Budget.  In fact, the Government Accountability Office reported that in 2010, the EITC was the fourth largest source for improper payments among all federal government programs, with an estimated $16.9 billion in improper payments.

###