IRS is having a field day auditing taxpayers who have taken the Education Tax Credit erroneously. It is one of the new IRS target for audits because of a large group of over aggressive taxpayers, lets say about 370k fit in this categorize.

The finding are such:

370,924 taxpayers received an estimated $550 million in education credits for which they were not eligible because they did not attend college for the required amount of time and/or were post-graduate students.

84,754 students who did not have a valid Social Security Number (SSN) were claimed by taxpayers who received $103 million in education credits. Each of these students had an Individual Taxpayer Identification Number (ITIN).

63,713 taxpayers erroneously received an estimated $88.4 million in education credits for students claimed as dependents or spouses on another taxpayer’s tax return; and, 250 prisoners erroneously received $255,879 in education credits. Additionally, an estimated 52 percent of the returns with potentially erroneous education credits were prepared by paid tax preparers, who should have been aware of the eligibility requirements.

“Based on the results of our review, the IRS does not have effective processes to identify taxpayers who claim erroneous education credits,” said J. Russell George, Treasury Inspector General for Tax Administration. “If not addressed, this could result in up to $12.8 billion in potentially erroneous refunds over four years,” Mr. George added.

IRS will be on the attack!  Call us 1-866-700-1040 for tax audit defense, former IRS Agents