IRS Needs More Data to Crack Down on Low-Income Credit: Watchdog

The IRS is struggling to spot incorrect tax returns among noncitizens that claim a refundable tax credit meant to benefit low-income taxpayers, a watchdog said.

The Treasury Inspector General for Tax Administration found in a report released Thursday that the data shared between the IRS and Social Security administration isn’t enough to determine if certain immigrants qualify for the earned income tax credit. This makes it harder for the agency to pick out who claimed the credit wrongly—a broad concern with the EITC.

Nonwork Social Security numbers are given to immigrants not authorized to work in the US ...