The US government screwed up $247 billion in payments last year and nearly $2.4 trillion over the last two decades — costing taxpayers dearly. 3 tips to make sure you’re paying just enough
The federal government reported a whopping $247 billion in payment errors during the 2022 fiscal year, according to the Government Accountability Office (GAO). The watchdog also says nearly $2.4 trillion in payment errors have been made over the past 20 years.
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The GAO's report is among the latest oversight reports to claim billions in wasteful spending by the federal government every year.
“The government has just lost, as if you dropped it on the sidewalk, trillions and trillions of dollars over the last few decades,” Richard Stern, a budget and spending expert from The Heritage Foundation, a conservative think tank, told CNBC.
“That is money that was stolen from hard-working Americans to just simply get wasted.”
What happened to those billions of tax dollars?
So what exactly is behind these billions of dollars in payment errors? Well, not all of them represented a loss to taxpayers.
The recently published GAO report indicates $200 billion in payment errors last year were the result of overpayments, while $5.3 billion were counted toward underpayments.
Another $32.7 billion in “unknown payments” were recorded, meaning it’s unclear whether the payment was an error or not. Finally, there were $9 billion in “technically payment errors,” meaning a recipient was entitled to a payment but the payment failed to adhere to rules or regulations.
Payment errors were reported by 18 agencies across 82 government programs. The vast majority of these errors (78%) were made under five programs — Medicaid, Medicare, the Paycheck Protection Program, Unemployment Insurance, and the Earned Income Tax Credit (EITC).
The GAO recommends better monitoring and planning by federal agencies to help identify risks for payment errors, and that the IRS review more W-2s before issuing tax refunds to lower the risk of tax refund fraud.
Read more: You could be the landlord of Walmart, Whole Foods and CVS (and collect fat grocery store-anchored income on a quarterly basis)
3 tips to lower your tax bill
There are steps one can take to ensure they’re not overpaying the tax man themselves, like checking and adjusting tax withholdings early in the year.
Taxpayers can also keep more money in the bank by following just a few simple steps. Here’s how.