Department of the Treasury
Institutional Affiliation: U.S. Department of the Treasury
NBER Working Papers and Publications
|March 2018||The Effects of EITC Correspondence Audits on Low-Income Earners|
with John Guyton, Kara Leibel, Dayanand S. Manoli, Mark Payne, Brenda Schafer: w24465
Each year, the United States Internal Revenue Service identifies taxpayers who may have erroneously claimed Earned Income Tax Credit (EITC) benefits and audits them through a mail correspondence process to verify their claims. This paper exploits the random variation arising from certain aspects of the audit selection process to estimate the impacts of these EITC correspondence audits on taxpayer behaviors. In the years after being audited, taxpayers are less likely to claim EITC benefits, and most of the reduction appears to be in EITC claims that may have been flagged for potential EITC noncompliance. Additionally, qualifying children on audited returns are more likely to be claimed by other taxpayers after the audits. These spillovers indicate that net overpayments may be less than gros...
|Long-Term Effects of Job-Search Assistance: Experimental Evidence Using Administrative Tax Data|
with Dayanand S. Manoli, Marios Michaelides: w24422
This paper uses administrative tax data to examine the long-term effects of an experimental job-search assistance program operating in Nevada in 2009. The program required randomly-selected unemployed workers who had just started collecting unemployment insurance (UI) benefits to undergo an eligibility review and receive personalized job-counseling services. The program led to substantial short-term reductions in UI receipt, and to persistent, long-term increases in employment and earnings. The program also affected participants’ family outcomes, including total income, tax filing, tax liability, and home ownership. These findings show that job-search assistance programs may produce substantial long-term effects for participants and their families.
|July 2015||Effective Policy for Reducing Inequality? The Earned Income Tax Credit and the Distribution of Income|
with Hilary W. Hoynes: w21340
In this paper, we examine the effect of the EITC on the employment and income of single mothers with children. We provide the first comprehensive estimates of this central safety net policy on the full distribution of after-tax and transfer income. We use a quasi-experiment approach, using variation in generosity due to policy expansions across tax years and family sizes. Our results show that a policy-induced $1000 increase in the EITC leads to a 7.3 percentage point increase in employment and a 9.4 percentage point reduction in the share of families with after-tax and transfer income below 100% poverty. Event study estimates show no evidence of differential pre-trends, providing strong evidence in support of our research design. We find that the income increasing effects of the EITC are ...