Earned Income Credit: IRS' 1995 Controls Stopped Some Noncompliance, But Not Without Problems
GGD-96-172
Published: Sep 18, 1996. Publicly Released: Sep 18, 1996.
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Highlights
Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) efforts to reduce Earned Income Credit (EIC) noncompliance in calendar year 1995.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should consider cost-effective ways to compile the kind of data needed to better assess the effectiveness and direction of its efforts to combat EIC noncompliance by routinely reporting data, by tax year, on the results of Examination efforts to validate eligibility for benefits. |
Closed – Not Implemented
Because of changes in IRS' procedures for validating eligibility for EIC benefits, the need for the kind of information contemplated by this recommendation has diminished.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should consider cost-effective ways to compile the kind of data needed to better assess the effectiveness and direction of its efforts to combat EIC noncompliance by tracking what happens to returns rejected by the Electronic Filing System. |
Closed – Implemented
GAO's recommendation was that IRS consider tracking returns rejected by the Electronic Filing System. IRS says that it has considered such action and decided that there would be limited benefit and that it could put its scarce computer programming resources to better use.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should consider cost-effective ways to compile the kind of data needed to better assess the effectiveness and direction of its efforts to combat EIC noncompliance by distinguishing the results relating to EIC-qualifying children from the results relating to dependents. |
Closed – Implemented
IRS changed its procedures for validating certain eligibility criteria for EIC benefits and is reporting the results in ways that should enable one to distinguish between the results related to EIC qualifying children from the results related to dependents.
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Topics
DependentsEligibility determinationsFraudInternal controlsNoncompliancePersonal income taxesSocial security numberTax administrationTax creditTax refunds