Another IRS scandal comes to light

Byron York:

There's no doubt congressional investigators have their hands full probing allegations the Internal Revenue Service targeted conservative non-profit groups. But now a different IRS scandal -- involving the chronic, ongoing, mind-bogglingly wasteful mismanagement of a popular tax credit program -- demands Congress's attention because it has taken on new importance with the arrival of Obamacare.

The program is the Earned Income Tax Credit, through which the federal government gives out between $60 billion and $70 billion to low-income working Americans each year. It's known as a "refundable" tax credit, but it is basically a transfer payment, in which the IRS sends a check — perhaps even $5,000 every year — to workers who have little or no tax liability.

The problem is, the IRS does little to determine whether recipients actually qualify for the money. A recent report by the IRS inspector general says the agency has given out somewhere between $110 billion and $132 billion in improper Earned Income Tax Credit payments in the last decade. In that time period, between 21 and 30 percent of tax credit payments went to people who didn't qualify for them.

That is bad enough. But what infuriates lawmakers is that the IRS refuses to do anything about it. Agency officials told the inspector general they couldn't fix the problem because the tax credit program is very complicated, and also because they are afraid vigorous enforcement would discourage legitimately qualified recipients from applying for credits. And the IRS is not only not working to reduce improper payments, it is refusing to report those payments to Congress as required. The bottom line, in the words of inspector general Russell George: "The IRS is unlikely to achieve any significant reduction in Earned Income Tax Credit improper payments."
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And now comes Obamacare. In the new national health care scheme, the IRS will do basically what it does with the Earned Income Tax Credit: It will determine Americans' eligibility for subsidies, to be paid in the form of tax credits, and then hand those tax credits out. And that has lawmakers concerned.

"Considering the IRS’s failure to address the Earned Income Tax Credit problem," says Camp, "there is no reason to think the agency will somehow do a better job administering the refundable tax credits included in Obamacare."
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It will take a change of administrations to get honest enforcement of the laws.  The Obama administration looks at laws as a beffet to pick and choose from rather than a requirement that all laws be faithfully executed.  It is a clear violation of Obama's duties under the constitution, but with Democrats controlling the Senate there is little that can be done about it at this point.