Red faced US tax officials admit child benefit cock-up

The US revenue is rushing out an extra 350,000 child benefit payments of $300 each after discovering some of its tax returns failed to capture the correct information for triggering payouts, webCPA.com reported.

The Internal Revenue Service admitted some of its tax software, primarily used by tax professionals, did not capture the proper information needed for issuing the stimulus payment.

It said it has worked closely with the two affected software vendors, and they have reported to the IRS that their software has been corrected. They are Petz Enterprises’ professional and online software, and CCH’s ProSystems fx Tax software and online CompleteTax software.

The IRS is taking extra steps to identify affected taxpayers and send them separate cheques to cover their qualifying children. The IRS emphasised that the corrected cheques will be mailed automatically, and taxpayers don’t need to call or take any additional steps.

Embarrassingly, it also admitted it had deposited about 1,500 tax rebates and economic stimulus payments in the incorrect bank accounts. The IRS is working on a case-by-case basis with taxpayers and banks to fix the problem.

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