IRS Shifted $63 Million Away from Unemployment Benefits

Saturday, April 17, 2010

Accounting errors by the IRS over a five-year period cost the federal government $63 million in unemployment insurance funds, according to a report by the Treasury Inspector General for Tax Administration (TIGTA). The foul-up began after an audit in 2003 resulted in changes by the IRS in its administration of the Unemployment Trust Fund. This fund helps bolster the government’s ability to provide additional benefits during peak periods of joblessness, including giving added assistance to states whose unemployment funds have run dry. Because of the mistakes, the money meant for the unemployment fund went instead to the federal government’s general 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 Inspector General J. Russell George. “When TIGTA brought this to the IRS’s attention, the IRS recalculated its expenses and submitted revised reports to correctly distribute those funds to the Unemployment Trust Fund.”
-Noel Brinkerhoff


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