Earned Income Credit

Opportunities To Make Recertification Program Less Confusing and More Consistent Gao ID: GAO-02-449 April 25, 2002

The earned income credit (EIC) is a refundable tax credit available to low-income, working taxpayers. Administering the EIC is not an easy task for the Internal Revenue Service (IRS). IRS has to balance its efforts to help ensure that all qualified persons claim the credit with its efforts to protect the integrity of the tax system and guard against fraud and other forms of noncompliance associated with EIC. Although IRS made some changes to its correspondence, improved its examiner training, and expanded taxpayer outreach, certain aspects of the recertification process continue to cause problems for taxpayers. Since the inception of the EIC Recertification Program in 1998, IRS has taken steps to improve some of the letters and forms it uses to correspond with taxpayers about the program. However, two standard forms that IRS uses in corresponding with taxpayers as part of the recertification process can lead to unnecessary taxpayer burden. IRS asks taxpayers to submit certain information as part of the process that can be difficult for some EIC claimants to obtain or is inconsistent with what many examiners consider acceptable.

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