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IRS Audits Discourage Earned Income Tax Credit Claims

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Taxpayers who receive the Earned Income Tax Credit (EITC) – a popular anti-poverty tool in the tax code – are audited at a higher rate than all but the wealthiest one percent of taxpayers. A new study finds that audits are discouraging workers from claiming the credit. In the years after they were audited, EITC recipients were 68 percent less likely to claim the credit compared to similar taxpayers. Hundreds of thousands of taxpayers have likely avoided claiming the credit in response to an audit, ProPublica reports.

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