IRS Tax Enforcement

Implementation Study of the Qualifying Child Residency Certification Requirement in Hartford, CT
As part of an error reduction/compliance effort around EITC, the IRS piloted a program requiring certain EITC recipients to "precertify" that their children lived with them. This report shows that the certification effort created significant burdens for taxpayers, free tax sites, and other groups in Hartford. As a result of the advocacy efforts of NCTC, Congressional opposition, and other factors, it appears that certification is dead. Provided by the Annie E. Casey Foundation.

National Taxpayer Advocate's 2005 Annual Report to Congress

Tax refunds sought by 1.6 million poor Americans over the last five years were secretly frozen and their returns labeled fraudulent, although the vast majority appear to have done nothing wrong, the Internal Revenue Service's Taxpayer Advocate told Congress on last Monday. Read the full story in the New York Times by David Cay Johston, keynote speaker at our September 2005 conference.

The National Taxpayer Advocate's office will hold a conference call for Coalition affiliates on the report and its implications for low-income taxpayers soon.

The Taxpayer Advocate's report also cited concerns in the areas of:

• Problem #1:  Fewer resources to taxpayer services, and reductions in face-to-face services.
• Problem #2:  Refund Freezes
• Problem #4:  Private Debt Collection
• Problem #8:  Refund Anticipation Loans

EITC taxpayers constituted three-fourths of those whose refunds were frozen, with an average income of just over $13,000.

The National Community Tax Coalition has advocated since its inception against the highly disproportionate targeting of EITC taxpayers for audits, exams and freezes. EITC error accounts for a tiny fraction of the 300-billion-plus dollar tax gap, yet EITC taxpayers are the targets of 48 percent of audits, despite constituting only 17 percent of taxpayers.

2005 Annual Report to Congress, Executive Summary
2005 Annual Report to Congress, Volume 1, Section 1 of 3 - Preface, Table of Contents and Most Serious Problems.
2005 Annual Report to Congress, Volume 1, Section 2 of 3 - Legislative Reccommendations.
2005 Annual Report to Congress, Volume 1, Section 3 of 3 - Most Litigated Issues, Case and Systemic Advocacy and Appendices.
2005 Annual Report to Congress, Volume 2 - Criminal Investigation Refund Freeze Study.

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