Audit finds IRS sent over $1.1 billion in child tax credit payments to ineligible taxpayers, failed to send $3.7 billion to eligible taxpayers

An audit issued by the Treasury inspector general for tax administration last week reviewed the accuracy of child tax credit disbursements made by the IRS between July and November 2021. The report found that the organization sent more than $1.1 billion in payments to ineligible taxpayers and failed to send another $3.7 billion to eligible taxpayers.

The American Rescue Plan Act was enacted in 2021 and increased child tax credit payments to $3,000 per child under 18 and $3,600 per child under 16.

The IRS incorrectly distributed 3.3 million payments to 1.5 million ineligible households. The organization also failed to deliver 8.3 million payments to 4.1 million eligible households.

The audit noted that despite the millions of incorrect or failed disbursements, 98% of the child tax credit payments made by the IRS between July and November 2021 were correct.