Menu Search Account

LegiStorm

Get LegiStorm App Visit Product Demo Website
» Get LegiStorm App
» Get LegiStorm Pro Free Demo

Tax Administration: Earned Income Credit Noncompliance

  Premium   Download PDF Now (20 pages)
Report Type Reports and Testimonies
Report Date May 8, 1997
Report No. T-GGD-97-105
Subject
Summary:

"Noncompliance" with the earned income credit (EIC) involves persons who either claim credits to which they are not entitled or claim credits in excess of the amount to which they are entitled. The Internal Revenue Service (IRS) has reduced the level of noncompliance, but it remains above 20 percent, with several billion dollars in overclaimed credits annually. A root cause of EIC noncompliance is the self-determination of eligibility by taxpayers combined with IRS' limited ability to verify eligibility before the refund is issued. The Treasury Department has announced eight proposals, six of which would entail legislation, to reduce EIC noncompliance. Those proposals provide a starting point for deliberations on what can reasonably be done to address this difficult problem. Various questions need to be answered in assessing those proposals, the most significant being whether they get at the real causes of noncompliance.

« Return to search Government Accountability Office reports