How much the government may have overpaid in college tax credit

Remember this week’s overview of the Minnesota State Colleges and Universities (MnSCU) system auditor’s report on fraud?

This little piece from the Associated Press might not fall into that category, but it gives you an idea of the scope of the financial screw ups:

Investigator: $3.2 billion in overpaid tax credits

WASHINGTON (AP) – A government investigator says 2.1 million

people received a total of $3.2 billion in college tax credits that

they weren’t entitled to last year.

 

The Internal Revenue Service is contesting the findings. The

agency says they’re based on a flawed analysis and are vastly

overstated.

 

The program in question is the American Opportunity Tax Credit.

It was created in President Barack Obama’s stimulus law in 2009.

The Treasury Department’s inspector general for taxes says most

of the erroneous payments went for students who the IRS had no

proof were in school.

 

Others were ineligible because they didn’t attend college long

enough or were graduate students, and some were claimed as a spouse

or dependent on another taxpayer’s return.

 

The report also says 250 prisoners wrongly received $256,000 in

the credits.