Unequal Burdens in EITC Compliance

38 Pages Posted: 4 Dec 2011 Last revised: 28 Oct 2015

Karie Davis-Nozemack

Georgia Institute of Technology - Scheller College of Business

Date Written: March 8, 2012

Abstract

Lower income means harsher treatment from the government for taxpayers who claim the Earned Income Tax Credit (EITC). EITC claimants are audited more often than any taxpayers other than the very wealthy. More concerning, however, is that the IRS audits EITC claimants by correspondence examination in a manner that unduly burdens access to this refundable tax credit, a credit that often keeps lower income workers out of poverty.

Improper payment law brings increased scrutiny to federal programs that issue erroneous payments. Because the EITC is alleged to have substantial improper payments, it is subject to federal improper payment law, which adds administrative process and burdens in hopes of diminishing erroneous payments. While other scholars have noted the relationship between improper payment law and the EITC, this article takes the unique view that improper payment law, instead of burdening EITC administration, could provide relief to the Service’s onerous EITC compliance methods.

Keywords: EITC, tax, Taxation, correspondence examinations, improper payment

JEL Classification: K1, K34

Suggested Citation

Davis-Nozemack, Karie, Unequal Burdens in EITC Compliance (March 8, 2012). Law and Inequality: A Journal of Theory and Practice, Vol. 31, 2012. Available at SSRN: https://ssrn.com/abstract=1967696 or http://dx.doi.org/10.2139/ssrn.1967696

Karie Davis-Nozemack (Contact Author)

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

HOME PAGE: http://mgt.gatech.edu/directory/faculty/davis-nozemack/index.html

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