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American Rescue Plan Act: Review of the Reconciliation of the Child Tax Credit

Report Information

Date Issued
Report Number
2023-47-035
Report Type
Audit
Special Project
Pandemic
Special Emphasis
American Rescue Plan Act of 2021 (ARPA)
Joint Report
No
Agency Wide
Yes (agency-wide)
Questioned Costs
$0
Funds for Better Use
$9,957,194

Recommendations

Review all of the 6,833 taxpayers with excess Child Tax Credit identified during our review and take appropriate actions to ensure that the taxpayers receive the correct amount of the Child Tax Credit.

Identify additional taxpayers after May 5, 2022, who received excess Child Tax Credit as a result of tax examiner error and take appropriate actions to ensure that these taxpayers receive the correct amount of the Child Tax Credit.

Review the 105 taxpayers who potentially did not receive all of their eligible Child Tax Credit identified during our review and take appropriate actions to ensure that they receive the correct amount of the Child Tax Credit.

Evaluate the priority of programming to ensure that processes and procedures are developed to identify and correct tax examiner entries input during the error correction process that exceed statutory limits, including a process to systemically reprocess corrected returns through Error Resolution programming before being released for processing.

On February 17, 2022, we notified IRS management of our concerns with undeliverable payments that post after the processing of the tax return. In these instances, the IRS processed the tax return as if the payment was received by the taxpayer. As a result, the taxpayer would receive less Child Tax Credit than they are eligible to receive. We recommended that the IRS develop a process to identify undeliverable payments after processing of the TY 2021 tax return.