Tax Evasion, IRS Priorities, and the EITC

Testimony

Tax Evasion, IRS Priorities, and the EITC

Statement of Leonard E. Burman before the United States House of Representatives Committee on the Budget; On Waste, Fraud, and Abuse In Federal Mandatory Programs
July 9, 2003

Abstract

The testimony discusses current statistics on tax evasion, the argument for trying to stem it, and why IRS efforts so far have been disappointing. It then focuses on specific issues related to the earned income tax credit (EITC). The testimony concludes that, while deterring system-wide tax evasion should be a high priority, the approach of targeting EITC recipients for intrusive pre-audits represents a poor use of limited compliance resources and threatens to undermine a highly effective program.

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