WASHINGTON (Sputnik) — The almost $19 billion increase was primarily due to the healthcare programs Medicare and Medicaid, as well as the Earned Income Tax Credit program, which which accounted for more than 75 percent of the government-wide improper payment estimate, the GAO stated.
"The improper payment estimate, attributable to 124 programs across 22 agencies in fiscal year 2014 was $124.7 billion, up from $105.8 billion in fiscal year 2013," the report said.
"[I]ncomplete or understated estimates and non-compliance with criteria listed in federal law hinder the government's ability to assess the full extent of improper payments and implement strategies to reduce them," the report cautioned.
Two US federal agencies did not report improper payment estimates for four risk-susceptible programs, and five programs with improper payment estimates greater than $1 billion were non-compliant with federal requirements for three consecutive years, it said.
"Addressing the estimated $385 billion net tax gap will require strategies on multiple fronts," the GAO warned.
Key factors that contribute to the tax gap include limited third-party reporting, resource trade-offs and tax code complexity, it added.
"The federal government continues to face an unsustainable long-term fiscal path. Changing this path will require difficult fiscal policy decisions to alter both long-term federal spending and revenue. … Over time, these issues involve amounts near or exceeding $1 trillion," the report noted.