Federal payment programs get more scrutiny over waste, fraud

(The Center Square) – House Republicans are demanding answers from the IRS on whether millions in taxpayer dollars are being lost to waste and fraud through a new Biden administration payment plan.

House Republican leadership on Ways and Means sent a letter to the IRS with questions about the child tax credit payments, which began this year. President Joe Biden has championed the plan, which expands the child tax credit and distributes it to families usually in the form of a monthly check or direct deposit.

Republicans, though, point out that tens of billions of dollars have been lost to fraud and waste through IRS programs in recent years. They argue that is happening again with this latest program.

“Approximately 4 million taxpayers who received a CTC payment via direct deposit in July were sent a paper check in August due to a programming glitch,” the letter read. “This has led to numerous problems with individuals not receiving the paper checks. The IRS announced that it had resolved a ‘technical issue’ that caused ‘fewer than 2%’ of CTC recipients not to receive their September payment. While this statement is framed as if it is a small issue, the IRS stated that about 35 million families received payments. Two percent of 35 million equals about 700,000 families. That is not a small problem.”

Data is changed and set up through an online portal, and critics say the infrastructure was rushed, making these kinds of problems inevitable.

Biden has pushed for an extension of the plan in the negotiations over reconciliation spending, but now it appears unclear whether that will happen.

“Our offices have received numerous calls about these problems and of course the IRS remains unable to provide timely customer service to resolve these problems,” adds the letter, which was led by Rep. Kevin Brady, R-Texas, and Mike Kelly, R-Penn.

The monthly child tax credit is not the only federal payment program under scrutiny. Congress enacted federal weekly unemployment payments of $300 to combat COVID-era joblessness. Those payments expired in September, though there is a push in Congress to reinstate them.

Watchdogs say much of those funds were lost to waste and abuse.

The Government Accountability Office released a report in July that reported states and territories overpaid by nearly $13 billion between March 2020 and April 2021. Some critics say that in addition to these accidental errors, the amount lost to fraud was much higher.

In light of that data, Republicans in the U.S. House and Senate sent a letter to the Government Accountability Office earlier this year calling for an investigation into the level of fraud and how it occurred. They estimate between $89 billion and $400 billion was lost.

“It is concerning that responsibility for determining how much fraud has occurred lies scattered throughout a web of bureaucracies,” the letter read. “The scattering of responsibilities suggests that Congress will be ill equipped to have adequate information to assess future unemployment insurance responses to large economic shocks; and, at the same time, ensure they are not plagued by gaping security holes that allow fraudsters an open window to use to unlawfully obtained taxpayer funds.”

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