Saturday, October 22, 2011

Investigator: $3.2 billion in overpaid tax credits

(AP) ? A government investigator says 2.1 million people received a total of $3.2 billion in college tax credits that they weren't entitled to last year.

The Internal Revenue Service is contesting the findings. The agency says they're based on a flawed analysis and are vastly overstated.

The program in question is the American Opportunity Tax Credit. It was created in President Barack Obama's stimulus law in 2009.

The Treasury Department's inspector general for taxes says most of the erroneous payments went for students who the IRS had no proof were in school.

Others were ineligible because they didn't attend college long enough or were graduate students, and some were claimed as a spouse or dependent on another taxpayer's return.

The report also says 250 prisoners wrongly received $256,000 in the credits.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2011-10-20-Tax%20Credit%20Mistake/id-01f8b75c93f74dfc853240c3838a463d

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