How to Lose $7 Billion in Taxpayer Money Without Really Trying

The IRS makes it easy:

How did the IRS manage to pay out $7 billion in improper child tax credits in the tax years, 2004-2007? That's the question that the Treasury Inspector General for Tax Administration (TIGTA) wanted to answer.

After an investigation, a report from TIGTA shows that the problem lies mostly in the inappropriate issuance of individual taxpayer identification numbers (ITINs). ITINs are assigned to people who are not eligible for Social Security numbers, but who need to comply with tax laws. ITINs are not valid for employment purposes. Even so, in 2006 nearly 293,000 employers allowed individuals without proper identification to work, and issued over 790,000 W-2s using only ITINs. The wages reported on these W-2s equaled more than $9.5 billion.

That's odd. The ITIN is a unique number issued by the IRS; it's pre-fix tells you right away it's an ITIN and not a Social Security Number. There should be no trouble programming the great IRS computer in the sky to recognize that any returns or claims filed under an ITIN should be held up and examined closely. How could the IRS let $7 billion get out before being noticed?