The letter stated nearly one third of those improper payments were due to income verification errors and the IRS’s current practice of relying on an applicant’s self-attested income and paying out the EITC before income is confirmed is not working.
Brady stated in the letter, “It is for situations like this that the U.S. Department of the Treasury developed the Do Not Pay (DNP) portal.”
And, despite the DNP tool being housed at the U.S. Department of the Treasury, and being available to all federal agencies, the committee indicated it is not being fully utilized by the IRS.
The reason for the letter was to confirm IRS’s use of DNP and what steps the agency is taking to encourage and increase utilization of tools, including income and employment data from payroll data providers, to decrease the rate of improper EITC payments.
The committee stated, “DNP is the Office of Management and Budget designated source of centralized data and analytic services to help agencies verify eligibility and to identify and prevent fraud, waste, and abuse associated with improper payments. It provides access to a number of databases containing information, which helps agencies determine whether they should pay a beneficiary.”The recently enacted Protecting Americans from Tax Hikes (PATH) Act of 2015 included several other important provisions aimed at reducing the improper EITC payment rate. DNP is another tool that can be utilized to help reduce improper payments.
The letter stated, “Reducing improper payments is critical to safeguarding federal funds, helping to achieve cost savings, improve the government’s fiscal position, and ensure we are meeting the needs of those who are eligible.”
They requested Koskinen’s prompt attention and a response by April 13.