After mistakenly issuing an estimated $2.3 billion in refundable credits from 2006 to 2009, the Internal Revenue Service is looking to implement a new tax screening method by the upcoming filing season.

The IRS was able to recover an estimated $1.3 billion of that total, but only around twenty percent came from a payment from the taxpayer. Eighty percent of the recovery resulted from taking money out of a future refund. 

An audit by the Treasury’s inspector general for tax administration found the IRS could have prevented hundreds of millions of dollars from being sent out if it had checked claims for one of the refundable credits, the Additional Child Tax Credit (ACTC), against those for another, the Earned Income Tax Credit (EITC).

With refundable credits, taxpayers can receive a payment from the government, in addition to having their tax burden erased. In addition to tax breaks for raising children, the government has previously enacted refundable credits for actions like buying a house (the First-Time Homebuyer Credit) and paying for college (the American Opportunity Tax Credit).

In its response to the audit’s findings, the IRS said that many erroneous claims are not filed intentionally, and that a filer who was not eligible for a refundable credit one year could easily be in subsequent years. The new screening method would ensure that a taxpayer’s history is available to the IRS when considering a refundable credit claim.