Do you trust the IRS? In light of its past scandals of inappropriately targeting conservative groups and donors, you’d probably say no. A new federal report from the Treasury inspector general does nothing to inspire our trust in the IRS’s most basic function of collecting taxes and accurately dispensing tax credits to qualified taxpayers.

Apparently, the IRS is improperly handing out as much as $7 billion each year through two tax credits meant to help poor families, the Earned Income Tax credit (EITC) and the Additional Child Tax Credit (ACTC). This is despite the agency claiming that they have these incorrect payments under control.

According to the report, the IRS estimated that it paid $63 billion in refundable EITCs and $26.6 billion in refundable ACTCs for Tax Year 2012. The IRS improperly paid $14.5 billion (24 percent) in EITC payments in Fiscal Year 2013. The rate for improper ACTC payments is similar to EITC (approximately 25-30 percent) meaning that an estimated $5.9 billion and $7.1 billion was erroneously paid out last year.

The IRS is falling down on its job. It has neglected to quantify or identify the root causes of improper ACTC payments, yet continually rates the risk of improper payments as low. The question is whether the IRS will adopt recommendations from the Treasury or continue to keep its head in the sand and waste tax payer dollars by giving them to the wrong people.

The Hill reports:

The findings from the Treasury inspector general for tax administration could add a new wrinkle to the debate over President Obama's recent actions on immigration. The watchdog found that the IRS needs to strengthen the protections in the Additional Child Tax Credit, after the agency had previously downplayed the risk of improper payments.

[J. Russell] George’s office recommended that the IRS show more urgency about reducing the money wrongly given out under the child tax credit, pushing the agency to find out more about why the improper payments were happening and to create a plan to stop them.

But the IRS generally disagreed with those recommendations, saying in its response that overpayments from refundable tax credits were a smaller part of the “tax gap,” the difference between what taxpayers owe and what the IRS collects.

In 2011, the watchdog also found that the IRS gave billions of dollars in child tax credits to people who weren’t authorized to be in the United States.

If nothing else, this is a reminder that the IRS has misplaced priorities.

We’ve reported extensively on the IRS scandal where all levels of actors were involved in nefarious efforts to target conservative political organizations seeking tax-exemption for greater scrutiny and to stymie their efforts during elections. Perhaps instead of wasting manpower and time on these efforts, the IRS should have been working on its own internal controls to ensure that the right taxpayers are receiving the correct tax benefits, rather than gaming the system.

Those who try to scam the IRS are wrong, but if the IRS made tightening loopholes a priority, we wouldn’t see $7 billion going to the wrong people.