Employer Noncompliance With Wage Reporting Requirements Significantly Reduces the Ability to Verify Refundable Tax Credit Claims Before Refunds are Paid

The Commissioner, Wage and Investment Division, should review the 4,509 tax returns TIGTA identified for which the IRS incorrectly allowed the CTC, ACTC, EITC, and AOTC and take the steps necessary to recover the almost $9.8 million paid to taxpayers in error.

The Commissioner, Wage and Investment Division, should review the 289 tax returns TIGTA identified for which the IRS incorrectly denied the CTC, ACTC, EITC, and AOTC and take the steps necessary to ensure that these taxpayers receive the $489,423 in credits to which they are entitled.

The Commissioner, Wage and Investment Division, should program the MeF system to verify the TIN issuance date on prior year tax returns and implement processes to reject retroactive CTC, ACTC, EITC, and AOTC claims filed using a TIN that was not issued before the due date of the tax return.

The Commissioner, Wage and Investment Division, should correct programming errors that resulted in the incorrect calculation of ITIN issuance dates and ensure that the RTS and the NAP are updated with the correct issuance date.

The Commissioner, Wage and Investment Division, should identify all ITINs with a missing issuance date on the NAP and ensure that the NAP is updated with the correct issuance date.