Sunday, July 27, 2008

IRS Audit - Stimulus Payments

Today we are going to have a little fun at the expense of the IRS. They can usually be pretty tough on us, and it is thankfully now their turn to be in the spotlight...

Obviously, everyone is bit afraid of receiving an IRS audit notice, but did you know the IRS is also "audited"? Yes, the Treasury Inspector General for Tax Administration (TIGTA) checks the IRS to make sure it is doing its job correctly.

This year with the stimulus payments, the IRS was correct 99.6% of the time, but that 0.4% was equivalent to 385,000 payments.

When calculating some stimulus payments, the computers had a programming glitch that allowed 25,000 to miss out on $16.5 million in payments. The people most notably affected were clergy and other individuals not subject to self-employment income.  Never smart to short change the clergy.

The most glaring mistake though was that 350,000+ people missed out on the child portion of the stimulus payment because they simply did not check the Child Tax Credit qualifying box on their return. When the TIGTA first approached the IRS regarding this mistake, they said they could not tell if the taxpayer was eligible thus no payment.

Subsequently, the IRS has come back and said they would pay the 350,000+ households that did qualify for the payment.

Nothing quite like someone trying to keep you in line when it comes to tax payments.

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