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The IRS Made a Mistake, Sent $1B To The Wrong People (it wasn’t me…)

The IRS Made a Mistake, Sent $1B To The Wrong People (it wasn’t me…)

WND News reported that the Internal Revenue Service (IRS) sent over $1.1 billion in child tax credits to the incorrect recipients in 2021 during the pandemic.

An audit by the Department of the Treasury’s Inspector General (IG) for Tax Administration showed that the IRS sent payments to about 1.5 million people between July and November 2021 by mistake.

What Really Happened?

According to the IRS, the errors were due to a problem in their computer systems that they corrected in 2021.

The audit states this is what the IRS did:

  • Failed to send $3.7 billion to eligible households
  • Sent 1.5 million taxpayer’s payments in error, some received 2 checks for 1 child
  • Did not send payments to 4.1 million eligible households
  • Incorrectly sent 6,829 reconciliation letters to taxpayers who got the credit
  • Incorrectly changed 1,610 taxpayers’ bank account information used to receive direct deposits of the credit

The IRS agency was, however, 98% accurate in sending more than 175 million child tax credit payments.

The incorrect payments were made to taxpayers whose dependent children, required to claim the credit, did not meet the age requirements (under 18 years old), were claimed on another filer’s return, or were deceased. These incorrect payments made up a small portion of the 178.9 million child tax payments made during the period, totaling over $76 billion.

You can read the official report here.

In 2021, the mistake by the IRS was reported to the public. The video below states that around 13,000 checks were sent to the wrong bank account.

Taxpayers Must Pay It Back

As stated by the IRS, families who received the money in error must pay it back when they file their tax returns for the 2021 tax year.

Families eligible for the benefit but did not receive the child tax credit payment may request it be granted in the 2021 tax return. Some of these cases are taxpayers who used a taxpayer number rather than a social security number to identify themselves, which is the case of many undocumented migrants who were also eligible.

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  1. Mike

    leave it to the IRS could mess up a one car funeral. so let’s add 85K more against then give them fire arms and badges. with a 1990 OS2 computer system. to go after fake accusations. to shoot first ask questions later.

  2. Rat Wrangler

    The IRS is a government agency manned by people. Rather than telling us the entire agency is at fault, I’d like to hear which people were responsible for this debacle, how they managed to do it, and what steps the agency plans to take to ensure it never happens again. I’d also like to know if any firings are involved. I recall an incident years ago where the private information of hundreds of taxpayers managed to be stolen. The theft occurred because a low-level IRS employee had a laptop in an unlocked vehicle. The laptop was stolen, and then it was found that it had a lot of taxpayer information on it that was not even encrypted. Hard drive encryption software was readily available at the time, but the IRS wasn’t using it on their field laptops. Of course, the media blamed the entire agency, rather than the few directly responsible for the problem.

  3. frank stetson

    From one side, it’s a 2% problem, probably one of the least wasteful government projects ever :>)

    On the other side, if they are asking for their money back, that’s a bitch for citizens. Because if they don’t get it, they might take it. As is, instead of getting that fat tax refund you might just see a deduction……and that can really suck if you planned on it. My sister had one of those once but it included a penalty too. I have never had to pay the penalty the IRA asked for…….but when they just take it, it’s hard to argue the point especially if you can’t find anyone at IRS to argue it with. “it’s the process, sir, sorry.”

    Should have a hat’s off for finding it in less than 12 months.