Earned Income Credit: Noncompliance and Potential Eligibility Revisions
(Testimony, 06/08/95, GAO/T-GGD-95-179).

The earned income tax credit is a major federal effort to help the
working poor.  As of May 1995, 17.3 million returns claimed nearly $20
billion in earned income credit for tax year 1994. Over the years, the
credit has been extended to (1) offset the impact of social security
taxes on low-income workers and (2) encourage low-income persons to seek
employment rather than welfare.  Overall noncompliance with the credit's
provisions has not been measured since 1988.  Nonetheless, noncompliance
appears to be a problem. Further, although the credit is intended to
assist the working poor, eligibility criteria have not considered all
the resources recipients may be able to draw on to support themselves
and their families.  Finally, no one knows how many illegal aliens
receive the credit.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD-95-179
     TITLE:  Earned Income Credit: Noncompliance and Potential 
             Eligibility Revisions
      DATE:  06/08/95
   SUBJECT:  Tax credit
             Eligibility criteria
             Disadvantaged persons
             Illegal aliens
             Noncompliance
             Income taxes
             Fraud
             Erroneous payments
             Tax administration
             Social security number
IDENTIFIER:  Tax Compliance Act of 1995
             Earned Income Tax Credit
             
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