When the IRS decided in 1986 to start requiring taxpayers to provide the Social Security numbers of the dependents they claimed on their tax returns, 7 million children seemingly vanished into thin air.
Apparently many taxpayers were listing their pets and imaginary children on their tax returns. A midlevel IRS employee who had a fascination with the types of creatures and objects claimed as dependents had suggested the change on the 1040. The story was recently told by Freakonomics and Super Freakonomics co-author Steven Levitt at a keynote address of the American Bar Foundation, according to a story in the ABA Journal linked to on the TaxProf blog. Levitt said he told the story to his father and he admitted that I had lost a brother and a sister that fateful night.
The IRS has been busy in the past quarter-century uncovering other ruses that taxpayers have been using to lower their tax bills. As some taxpayers no doubt will be learning after this tax season, Sparky is just not going to pass muster if their returns ever get audited.