The City of Hartford filed a lawsuit in District Court this week to block an Internal Revenue Service test aimed at reducing erroneous earned income tax credit payments that the city alleges violates taxpayers' civil rights and discriminates against its African-American and Latino taxpayers, who make up the bulk of those who receive the credit.
According to the city, the Hartford pre-audit effort, which it says constitutes one-third of a nationwide test of the EITC by the IRS, would allow the agency to delay or deny payments to 8,200 Hartford area families who receive the EITC until they submit sworn statements from third parties (such as ministers, daycare workers, etc.) proving that their children resided with them for more than six months out of the year. The city said that the amount of delayed or denied payments could exceed $14 million in the Hartford area alone.
The lawsuit alleges that IRS Commissioner Mark Everson has never been authorized by Congress to "selectively deny or delay payments to taxpayers simply because they have been identified for participation in a test of 'error reduction techniques,'" and further alleges that the pre-audit of Hartford area taxpayers "is a violation of their civil rights and will disproportionably deny/delay payments to working families of color and those with a limited proficiency in English." The suit also alleges that the program makes no provisions for those who have been called up to active duty military service.
IRS spokeswoman Nancy Mathis said that the agency couldn't comment because it hadn't seen the lawsuit, but a statement from the IRS said, "We are testing a certification program intended to reduce the high EITC error rate. The Government Accountability Office has designated EITC as 'high risk' because of its high rate of erroneous payments. This certification effort is in response to that designation."
"The IRS and Commissioner Everson are strongly committed to the fair implementation of EITC. Our objective is to maximize participation and minimize the error rate. We want all eligible taxpayers, but only those who are eligible, to claim this important credit," the IRS continued. "The certification program underway in Hartford County is the second phase in a series of tests launched last year. Hartford County was chosen by career statisticians because its population mirrors the EITC population nationwide."
Mayor Eddie A. Perez called the program "part of a continuing effort by this administration and the Republicans in Congress to dismantle the EITC program, a significant source of tax relief for working families."
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access