WASHINGTON - The IRS paid at least $6 billion in child tax credits in 2013 to people who weren't eligible to receive them, a government investigator said Tuesday.
Payments went to families that mistakenly claimed the tax credit or claimed the wrong amount, as well as taxpayers who committed fraud, according to an audit by J. Russell George, the Treasury inspector general for tax administration.
The audit highlights problems with a tax credit that President Obama has championed as a way to help low-income working families.
Obama's 2009 economic stimulus package temporarily expanded the credit to more families that don't make enough money to pay federal income tax. The expanded credit expires at the end of 2017.
These families receive the $1,000-per-child credit in the form of a tax refund. The report released Tuesday focused on payments to these families.
For years the IRS has said the risk is low for improper payments related to the child tax credit. The report says that assessment is incorrect.
"It is imperative that the IRS take action to identify and address all of its programs that are at high risk for improper payments," George said.
In a statement, the IRS said it "continues to aggressively explore new ways to detect and stop potentially fraudulent claims while maximizing the use of limited compliance resources."