Earned Income Credit:

Targeting to the Working Poor

GGD-95-122BR: Published: Mar 31, 1995. Publicly Released: Apr 4, 1995.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO: (1) provided information on Earned Income Credit (EIC) noncompliance and the Internal Revenue Service's (IRS) actions to control EIC noncompliance; (2) reviewed the potential impacts of changes in EIC eligibility criteria; and (3) provided information on how many illegal aliens receive EIC and the Administration's proposal to exclude illegal aliens from EIC.

GAO found that: (1) reliable IRS noncompliance measures for the EIC program do not exist and reliable data on the current extent of noncompliance is unavailable; (2) in 1988, about 42 percent of recipients received too much EIC and about 32 percent could not document their EIC entitlement; (3) 29 percent of the recipients who filed electronic returns in 1994, received too much EIC and 13 percent of these recipients deliberately claimed too much EIC; (4) to detect erroneous EIC claims, IRS developed improved criteria for detecting multiple use of the same social security number (SSN) and valid SSN for qualifying children; (5) adding taxpayers' wealth and other income sources as EIC eligibility criteria could produce significant EIC savings; (6) the additional EIC eligibility criteria would increase EIC complexity and the administrative burden of collecting needed data and treating similar taxpayers equally; (7) IRS does not know how many illegal aliens receive EIC because it does not prohibit them from claiming EIC or require them to identify themselves on IRS forms; (8) Administration and legislative proposals would exclude illegal aliens from EIC eligibility; and (9) the Administration's proposal would require all EIC claimants to have valid work-related SSN and permit streamlined IRS procedures to enforce the requirement.

Oct 30, 2020

Sep 24, 2020

Aug 28, 2020

Aug 13, 2020

Jun 16, 2020

Feb 27, 2020

Jan 9, 2020

Dec 18, 2019

Oct 21, 2019

Looking for more? Browse all our products here