The Treasury Inspector General for Tax Administration (TIGTA) today publicly released its review of the Internal Revenue Service's ability to verify taxpayer eligibility for tax benefits and credits provided by the American Recovery and Reinvestment Act of 2009 (the Recovery Act).

The Recovery Act contains 56 tax provisions with a potential cost of more than $325 billion that are intended to provide tax relief for individuals and businesses. These include 20 provisions for individuals that provide tax relief to working or retired Americans and their families. Thirty-six additional provisions provide tax relief and incentives for businesses, including provisions that encourage investment in sources of renewable energy and promote the hiring of unemployed veterans. They also allow for the sale of bonds to provide for construction, financing, environmental and manufacturing improvements.

TIGTA found that the IRS is unable to verify taxpayer eligibility for the majority of Recovery Act tax benefits and credits at the time a tax return is processed. This includes 13 of the 20 benefits and credits for individual taxpayers and 26 of the tax provisions benefiting businesses.

"Since verifying eligibility for Recovery Act benefits would require the IRS to request specific documentation from taxpayers, the IRS relies on taxpayers to accurately report income and claim only those tax benefits and credits to which they are entitled," commented J. Russell George, the Treasury Inspector General for Tax Administration.

TIGTA made no recommendations in this report. However, TIGTA has ongoing and planned audits that will focus on specific Recovery Act benefits and credits and plans to include recommendations, when appropriate, as part of these reviews.