The Washington Examiner reports that the IRS failed its own audit, having been found to have made billions in refunds to people who don't deserve them using a program that by 2014 could result in $65 billion being given away to unqualified recipients.
The EITC is a kind of reverse-tax program for low- and moderate- income individuals. If the federal tax credit is more than the amount of taxes owed, the individual gets a "refund" check. In tax year 2010, the maximum EITC for a single individual was $457, going up to $5,666 for a couple with three or more qualifying children.
The loss to taxpayers from the IRS's lackadaisical enforcement of its own rules was a staggering $11 to $13 billion in FY 2009 alone, reports the Treasury Inspector General for Tax Administration.[snip]
"Using IRS estimates for Fiscal Year 2009, it is likely that the IRS will have issued anywhere from $55 billion to $65 billion in improper payments by Fiscal Year 2014"....
Why are we even giving tax refunds to people who don't pay taxes?