IRS to Evaluate Audit Processes for Earned Income Tax Credit

The Internal Revenue Service agreed with watchdog findings that the process for examining compliance with the earned income tax credit could be improved.

A Treasury Inspector General for Tax Administration report, released Thursday, called on the agency to improve its detection and prevention of earned income tax credit claims with the highest tax compliance risks. TIGTA said the credit for low- and medium-wage earners—meant to offset payroll taxes—accounts for an estimated $27 billion of the individual income underreporting “tax gap” and has accounted for almost 31% of all IRS audits in the last 10 years.

• The ...