Don’t look for it to be done anytime soon. IRS officials told the inspector general that the program was too complicated to administer correctly, and even if it were less complicated, they would not want rigorous enforcement measures to discourage legitimately qualified people from applying for the credit. In the words of the inspector general’s report: “The IRS cited the complexity of the Earned Income Tax Credit program as well as the need to balance the reduction in improper payments while still encouraging individuals to use the credit as the two main reasons why reduction targets have not been established.”
Given that, inspector general Russell George concluded, “The IRS is unlikely to achieve any significant reduction in Earned Income Tax Credit improper payments.” So, look for billions more to be wasted in improper payments this year. And next year. And so on.
This is the very same IRS that will administer Obamacare’s subsidies and penalties. Does anyone doubt that in coming years the IRS will use the same excuses — complexity, a desire not to discourage qualified recipients — to explain its lack of enforcement, or perhaps refusal to enforce, Obamacare’s requirements?
The process has already begun. Back in July, the Obama administration announced it will not require state-run Obamacare exchanges to verify whether individuals who receive subsidies for health coverage are actually qualified for those subsidies. The administration will rely instead on an honor system in which it accepts an applicant’s word that he or she is eligible — a decision many analysts call an invitation to fraud.
In September, the Republican-controlled House passed a bill to require verification for all subsidies. This month, a much weakened version of that proposal became part of the settlement of the government shutdown. But the bottom line is, don’t expect the federal government to do much checking on who is receiving subsidies.