Earned Income Credit:

Noncompliance Relative to Other Components of the Income Tax Gap

GGD-97-120R: Published: Jun 13, 1997. Publicly Released: Jun 13, 1997.

Additional Materials:


Lynda D. Willis
(202) 512-3000


Office of Public Affairs
(202) 512-4800

GAO compared noncompliance and associated Internal Revenue Service (IRS) enforcement issues for Earned Income Credit (EIC) claimants and other taxpayer groups, such as the self-employed.

GAO noted that: (1) IRS estimated that 25.8 percent of EIC, or $4.4 billion, was overclaimed in tax year 1994; (2) this is a relatively high error rate, but the gross dollar amount is lower than that of some other taxpayer groups; (3) for example, underreporting of income by self-employed individuals accounted for nearly $30 billion of the estimated $128 billion in taxes owed but not voluntarily paid for tax year 1992; (4) in general, the simpler the tax rules and the more visible tax information is to the IRS, the higher the compliance; (5) consistent with this, the overclaim rate among EIC recipients is relatively high, in large part, because taxpayers determine their own eligibility; and (6) similarly, noncompliance among the self-employed is relatively high because their business income is neither subject to withholding nor generally covered by information reporting.

Jan 30, 2018

Dec 20, 2017

Dec 18, 2017

Nov 30, 2017

Nov 28, 2017

Sep 6, 2017

May 18, 2017

May 17, 2017

Apr 27, 2017

Apr 26, 2017

Looking for more? Browse all our products here