Washington (June 16, 2003) -- Internal Revenue Service Commissioner Mark W. Everson has announced steps designed to both improve service to Earned Income Tax Credit eligible taxpayers and to reduce erroneous claims by taxpayers who do not meet the eligibility standards established by Congress. During his confirmation process and in recent testimony before Congress, Everson pledged to enhance the IRS's service to taxpayers and to review a proposal in the President's budget to strengthen compliance in this area.
The EITC provides low-income taxpayers with a refundable credit. Approximately 19 million taxpayers claimed over $32 billion of such credits on tax year 2002 returns. However, a recent study indicated that between $8.5 billion and $9.9 billion (27 percent to 31.7 percent) in EITC claims was paid erroneously in tax year 1999. The General Accounting Office has concluded that the EITC will remain one of the government's "high risk" programs until the IRS designs and implements effective controls to deal with noncompliance and erroneous refunds in the billions of dollars.
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