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Few checks

The Treasury Department’s inspector general for tax administration has issued a report with a little-noticed warning: The Internal Revenue Service has no way to verify many of the tax breaks authorized by the stimulus bill enacted earlier this year.

The $787 billion economic stimulus bill, formally called the American Recovery and Reinvestment Act, doled out 56 new tax breaks and credits, 20 of which were targeted toward individual taxpayers and 36 toward businesses. But the IRS is unable to track more than half of them.

“The IRS cannot verify the accuracy of all the legislated requirements before the tax return has completed processing for 39 Recovery Act provisions,” said the audit, issued by Inspector General J. Russell George. “To a great extent, the IRS relies on taxpayers’ voluntary compliance with tax laws to accurately report income and claim only those tax benefits and credits to which they are entitled.”

The IRS said it would require more documentation from the taxpayer as a part of the filing process to verify eligibility for the breaks.

A pattern

The tax administration inspector general’s report follows an audit by the Treasury Department’s inspector general that found massive fraud and error in the government’s new first-time-homebuyer credit program.

The program was created to help draw more people into the housing market in hopes of jump-starting sales, but Inspector General Russell George said in a report dated Sept. 29 that tens of thousands of people received the credit without ever buying a home. According to the report, 19,351 taxpayers claimed the $8,000 tax credit for homes that had not been purchased, providing them with more than $139 million in tax breaks.

Some people claimed the credit for homes that were not their first. The audit flagged 70,005 questionable claims, worth $479 million, made by people who were likely not first-time homebuyers. Roughly a third of those flagged had claimed energy tax credits on one of their previous three tax returns, indicating they already owned a principal residence.

Worse yet, 582 taxpayers younger than 18 claimed nearly $4 million in credits for first-time homebuyers. The youngest among them were 4.

Again, the Treasury recommended that the IRS require more documentation before the tax credits are authorized.

Teachers’ pick

The National Education Association, a labor union for teachers, is encouraging its members to read a book on bare-knuckled politics written by a community organizer loathed by conservatives.

Under a section of the NEA Web site titled “Recommended Reading” is an in-depth, positive review of Saul Alinsky’s book “Rules for Radicals,” with links to purchase it on Amazon.com.

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