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Pastimes : The New Qualcomm - write what you like thread. -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (2160)	9/22/2000 10:28:10 PM
From: Jon Koplik	Respond to of 12229

<font color=OrangeRed>Lots of tax fraud among not so "stinkin' rich." September 22, 2000 IRS : Fraud in Tax Program for Poor By THE ASSOCIATED PRESS Filed at 6:37 p.m. ET WASHINGTON (AP) -- A tax program for the working poor that Democratic presidential candidate Al Gore wants to sharply expand lost $7.8 billion because of fraud and errors in 1997 -- one-quarter of the claims made that year, the Treasury Department reported Friday. Treasury Secretary Lawrence Summers said the earned income tax credit has played ``a vital role'' in lifting millions of people out of poverty but acknowledged that steps need to be taken to reduce the error rate. ``It is critical that we take steps to preserve the integrity of the EITC and better ensure that only eligible families are receiving the credit,'' Summers said Friday. The study by the Internal Revenue Service comes as Gore is proposing a 10-year, $29 billion plan to expand the credit so that 6.8 million more working families would qualify, according to Gore campaign documents. President Clinton also proposed expanding the credit in this year's budget. Republicans on Capitol Hill called the errors unacceptable and said it should raise a red flag about any proposal to expand it. ``There's absolutely no reason why the EITC should be expanded until this terribly costly problem is fixed,'' said Rep. Bill Archer, R-Texas, chairman of the House Ways and Means Committee. ``This is exactly, and unfortunately, what happens when politicians use the tax code as a mechanism for massive social spending programs.'' Gore campaign spokesman Doug Hattaway said the report did raise concern about how the EITC is run but added it would not deter the vice president from pushing his proposal. ``Al Gore thinks expanding it is the right thing to do,'' Hattaway said. ``We need to see that everyone enjoys the prosperity we have. We all obviously want to see that it's administered correctly.'' The EITC, created by Congress in 1975 with strong bipartisan support, applies to working people with incomes below $30,580, depending on number of children. It is refundable, meaning that even if a taxpayer owed no income tax they can get a government check by claiming the credit -- about 86 percent of claims represent this form of direct cash assistance. The credit is difficult to figure out and has always been plagued by errors. In 1997, the IRS found that 25.6 percent of more than $30 billion in claims ``should not have been paid'' due to mistakes or fraud. About 20 million taxpayers made EITC claims that year. The most common errors: --22 percent of the money paid, over $2 billion, went to taxpayers who claimed children that don't qualify. Most often, this happened because the child didn't live with the taxpayer for at least six months. --17 percent of claims, representing $1.6 billion, involved children who lived with more than one adult -- and the second adult made too much money to be eligible for the EITC. --14 percent, or $1.3 billion, stemmed from income reporting errors. --10.5 percent, involving $974 million, claimed single status when they shouldn't have. The IRS noted that several measures passed by Congress to improve compliance were not fully in effect in 1997, including new penalties, more money to check returns and better access to government data about a child's parents and where they live. Summers, however, said the IRS needed to take additional steps this year, including new warning notices to taxpayers who don't appear to be eligible based on past claims, better efforts to educate paid preparers in how to figure the EITC and greater authority to deny claims in certain circumstances. The Clinton administration is also asking Congress for several changes in the law, including giving the IRS authority to deny claims made by certain taxpayers before the actual payments are made. Copyright 2000 The New York Times Company