Tax Administration: IRS Issued Advanced Child Tax Credit Payments on Time but Should Study Lessons Learned

GAO-04-372 Published: Feb 17, 2004. Publicly Released: Feb 26, 2004.
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The Jobs and Growth Tax Relief Reconciliation Act of 2003 provided eligible taxpayers up to $400 in advance Child Tax Credit (ACTC) payments. GAO was asked for information on (1) the number, dollar amount, and timeliness of the ACTC payments, (2) the impact on the Internal Revenue Service's (IRS') toll-free telephone service, (3) the cost to IRS and the Financial Management Service (FMS) for implementing the advance payment effort, including the impact of these costs on other IRS programs, and (4) the extent to which IRS identified and used evaluations from the 2001 advance refund effort to implement the ACTC payment effort and whether an evaluation of the ACTC payment effort is planned.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should conduct a modestly scaled "lessons learned" evaluation of the ACTC payment effort similar to the one conducted for the 2001 advance refund effort.
Closed – Implemented
In February 2004, GAO reported on IRS's issuance of advance child tax credit payments to taxpayers as mandated by Congress. GAO recommended that IRS prepare a "lessons learned" study on the advance child tax credits that might help them improve issuance of future advance payments. In August of 2004, IRS created a project report entitled "Lessons Learned from the IRS Implementation of the Advance Child Tax Credit Legislation", which provided both positive and negative lessons learned and will be helpful in implementing further advance tax credits.

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