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Child Tax Credit Expansion to Filers Without Income Raises Fraud Concerns

by Just The News
June 27, 2021
in Economy
Child tax credit expansion to filers without income raises fraud concerns

Congress’ decision to expand the child tax credit to allow more individuals and couples to qualify, including those without income, has raised concerns of heightened fraud and improper payments made by the IRS.

House Majority Leader Steny Hoyer (D-Md.) urged the Treasury Department and the IRS on Tuesday to “tighten up the system” as the agencies prepare to send out advance monthly child tax credit (CTC) payments.

As the IRS begins to roll out an automatic advance monthly payment system for the CTC with the first payments starting in July, there’s a risk of double CTC claims in “split custody situations,” according to Garrett Watson, an expert with the Tax Foundation.

The monthly payments were included as part of President Biden’s $1.9 trillion American Rescue Plan. The payments would be based on information reported to the IRS on tax year 2020 or 2019 returns. The $1,400 stimulus payments in Biden’s rescue plan were based on the same tax information.

“One risk is in figuring out who gets monthly payments in split custody situations,” Watson told Just the News. “Right now, there is often agreement to alternate claiming the credit annually, and it’s unclear how that would translate to monthly payments. There is a risk of double claims, if there isn’t a straightforward way to figure that out, resulting in clawbacks.

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“The other risk is when advancing the credit, the filer needs to accurately account for expected income and marital status. Getting those wrong could result in needing to pay some of the advanced amount […]

Read the rest of this story here: justthenews.com

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