Internal accounting errors by the Internal Revenue Service reduced federal funding available for unemployment benefits by $63 million, according to a new report.
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While the IRS has improved its reporting of expenses associated with administering the fund, it still lacks sufficient controls to ensure that costs are calculated accurately. TIGTA found that the IRS overstated its expenses by $63,368,413 over a five-year period. These excess funds were transferred to the General Fund for overall federal government operations instead of remaining in the Unemployment Trust Fund.
In these difficult economic times, the American people need to be assured that all unemployment taxes collected by the IRS are used for their intended purpose providing economic relief to their fellow citizens who are unemployed, said TIGTA Inspector General J. Russell George in a statement. When TIGTA brought this to the IRSs attention, the IRS recalculated its expenses and submitted revised reports to correctly distribute those funds to the Unemployment Trust Fund.
TIGTA recommended that the IRS update its procedures for calculating the cost of administering the fund. The IRS agreed with TIGTAs recommendations.