The IRS released yesterday a study on taxpayer compliance when claiming the Earned Income Tax Credit (EITC) in tax years 2006 through 2008. The IRS found no discernible change in the overall tendency for noncompliance between 1999, when a similar study was last carried out, and 2006–2008. Nevertheless, estimates of noncompliance were still quite significant, with an estimated 28.5–39.1% total dollars overclaimed as a percent of total dollars initially claimed for EITC on taxpayer returns, amounting to $14 billion to $19.3 billion in total dollars overclaimed. Misidentification of qualifying children accounted for the largest dollar amount of overclaims, while misreporting income was the most common error.
The report may be accessed here.