This is a rush transcript from "Your World With Neil Cavuto," April 16, 2010. This copy may not be in its final form and may be updated.
ERIC BOLLING, GUEST HOST: All right, tax day’s over, but one guy just uncovered more than 24 million bucks in bogus IRS tax breaks.
Russell George is the treasury inspector general for tax administration.
Well, first of all, thank you for uncovering the 24 million bucks. But $24 million doesn’t sound like a lot, sir. Go ahead.
J. RUSSELL GEORGE, TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION: Well, actually, it’s slightly more than 24 million. That was just one credit that we uncovered, wasteful spending by the IRS.
It was the Making Work Pay credit, which was designed to help working- class families stimulate the economy through extra payments to them. And it’s an overall $25 billion program. But what we found out is that the IRS, despite having the ability to determine in advance what amount of money a taxpayer is entitled to, would still pay out more than the taxpayer was entitled to receive.
BOLLING: Well, why would that happen? How in world would they say, "Here, we know how much he’s supposed to get," and then cut a check for more than that amount?
GEORGE: Well, unfortunately, it’s literally the left hand not knowing what the right hand is doing.
And that’s very troubling. This is something that has been a perennial problem with the IRS. They have taken steps to address this. And, in a moment, I can talk about some of the modernization efforts and a few other programs where we thought they would have done better, and, alas, they have not.
BOLLING: Well, before you do that, let’s talk about what is really going on here. Does this complicate — is all the stimulus package, all these entitlements, are they complicating your tax return?
GEORGE: Yes. There’s no question that both the IRS, as well as taxpayers, are having difficulty implementing the new tax provisions that were included in a lot of the economic stimulus laws that recently passed.
So, for example, the homebuyer’s tax credit, the Treasury Inspector General for Tax Administration, my office, issued an audit last year which laid out a number of problems associated with the program. Subsequent to that testimony and to that report, Congress passed legislation which we thought corrected many of the problems.
And then, in the interim report that we’re discussing now, we have found out that over 50 percent of taxpayers claiming a credit are not complying with the law that was passed to help tighten up the program.
BOLLING: And, if I’m not mistaken, they’re being audited at a higher rate as well; is that right?
GEORGE: Well, the IRS — you know, that’s the one good thing about the IRS in this filing season is, they’re being much more customer- friendly.
And, so, instead of calling it an audit, while technically it may be that, what they’re doing is, they’re holding these returns to the side, and they’re working with taxpayers, in an attempt to help them resolve the issue, to prove that they actually purchased a home, and then, if they’re actually entitled to the credit, to receive it.
BOLLING: All right. There it is.
Russell George, treasury inspector general, thank you very much, sir.
GEORGE: It’s my pleasure. Thank you for having me.
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