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U.S. Estimates Erroneous Awarding of $3.2B in Education Tax Credits

October 21, 2011
 

More than 2 million American taxpayers received as much as $3.2 billion in education tax credits to which they were not entitled, the U.S. Treasury's inspector general for tax administration said in a report Wednesday. The refundable tax credits were expanded as part of the federal economic stimulus legislation in 2009, and the report said an inquiry had found that 1.7 million taxpayers received $2.6 billion even though the Internal Revenue Service could not document that they had attended an accredited college or university. Another half million or so taxpayers got tax breaks even though they did not attend college for long enough, did not have a valid Social Security number, or were claimed as dependents on another taxpayer's return. “Based on the results of our review, the IRS does not have effective processes to identify taxpayers who claim erroneous education credits,” J. Russell George, the inspector general, said in a news release.

 
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