Tax Administration: Erroneous Dependent and Filing Status Claims
GGD-93-60
Published: Mar 19, 1993. Publicly Released: Mar 19, 1993.
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Highlights
Pursuant to a congressional request, GAO reviewed erroneous dependent and tax filing status claims, focusing on: (1) whether the laws on dependents and filing status need to be simplified; (2) what the Internal Revenue Service (IRS) is doing to address any erroneous claims; and (3) any changes that IRS could make in its compliance programs.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should consider enacting legislation that would substitute a residency test similar to that used in the Earned Income Credit program for the dependent support test when the dependent lives with the taxpayer. If this legislation is enacted, Congress also should consider eliminating the household maintenance test as a condition for claiming the head of household filing status. |
Closed – Not Implemented
|
Since 1993, Congress has not deliberated very much on proposals to implement the recommendation. As a result, GAO is closing this recommendation. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should correct the operational problems in its limited matching program and implement a 100-percent computer matching program to identify erroneous dependent claims. |
Closed – Implemented
IRS is doing 100-percent computer match for the 1995 filing season. IRS will code and transcribe SSNs for up to four dependents per return. Dependent SSNs not matching the SSA file will "fall out" in the Error Resolution System for further action.
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Topics
DependentsIncome taxesTax administrationTax administration systemsTax creditTax exempt statusTax lawTax returnsTaxpayersVoluntary compliance