The Internal Revenue Service, while it has trouble rubbing two dimes together to finance large-scale, long-term investigations of potentially tax-delinquent billionaires, is spending an inordinate amount of its budget trying to rub out the penny-ante errors made by people filing for an Earned Income Tax Credit (EITC).
Since these are taxpayers with annual incomes mostly in the $30,000 to $50,000 range, the dollars at stake here are small, and the errors, experts on the EITC say, are more often due to confusion and poorly-written instructions than from criminal intent to defraud.
Strong evidence for that is a major study that showed that roughly 20 percent of EITC applicants do credit themselves with too much. But an even larger number of people, cost themselves EITC money for which they are eligible, because they fail to apply for it.
The IRS people behind the EITC crackdown say they are eliminating “waste, fraud and abuse,” but all too often, it’s their busts that are a waste of resources based on wolf-cries about alleged fraud and abuse of the people under investigation.
A perfect example of a bogus “wild waste chase” was let loose by the Human Service Department of the State of New Mexico some six years ago. From her inaugural address in 2011 forward, Republican Governor Susana Martinez declared her intention to stamp out “waste, fraud and abuse” in public contracts, and in 2013 she claimed a big trophy for her wall: the 15 behavioral health service providers whose focus was on clients who were mentally ill or addicted to alcohol or drugs.
Based on as yet untested claims of $36 million worth of fraud, Governor Martinez and her Health Services Department (HSD) immediately closed all 15 out of their Medicaid accounts. An HSD lawyer told the providers that were all contractually obligated to continue to service their sick, troubled and addicted clients, even with most of their income cut off. Most of them simply shut down operations, and were replaced by five behavioral health providers from Arizona.
The transition did not go smoothly, and dozens, perhaps hundreds of needy clients effectively disappeared, although one respected provider Easter Seals El Mirador in Santa Fe says seven disaffected clients died after the shutdown – some by suicide, some from drug overdose or self-neglect.
Meanwhile, despite HSD’s best efforts to hide the facts, it slowly came out there was no fraud – in fact, the state’s $2 million audit team never made a single charge of fraud and never recommended closing any of the agencies, except as a last resort when other, much milder interventions failed.
As for the Arizona replacements, for whom the fix was in before any evidence was produced that anything was broken in the behavioral health system… How’d they do?
Most of them went home before completing their contracts. All of them cut back on personnel and services and left hundreds of mentally ill or addicted people high and dry.
It’s a terrible story of mis-governance, but the worst part of it by far is what it did to service providers, many of them with decades of selfless service on their records, and what it did (and is still doing) to the clients in need who were collateral damage in a grotesque political war.
Recently their story was very powerfully told in a new documentary The Shake Up, which was shown on the state’s public television stations. Our guest today, Ben Altenberg, directed The Shake Up.
Ben Altenberg directed The Shake-Up, a project tuned to his interests in both nonfiction media and public health. He recently co-founded, Readily Apparent Media, ehich he hopes to grow into a production house capable of turnkey services, documentary research, and archival rights & clearances. He says, “Nothing brings me peace of mind like an honest day’s work.”
To see The Shake Up…here’s the link: