Internal Revenue Service
77 K. St. NE
Washington, DC 20002
Institutional Affiliation: Internal Revenue Service
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, Ankur Patel, Mark Payne: 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...
|January 2016||Reminders & Recidivism: Evidence from Tax Filing & EITC Participation among Low-Income Nonfilers|
with John Guyton, Dayanand S. Manoli, Michael Sebastiani: w21904
This project examines how reminders affect tax filing among lower-income nonfilers (individuals who did not appear on a filed tax return but had income reported by third parties to the Internal Revenue Service). We present novel data on this population and results from two randomized controlled trials. The results demonstrate that one-time reminders increase tax filing, both to claim tax refunds based in part on withholdings and Earned Income Tax Credit benefits, as well as to voluntarily pay balances owed to the IRS. However, these effects do not persist. Consistent with recency effects, individuals who owe a balance due appear more likely to recidivate into nonfiling than those who receive refunds. Follow-up reminders continue to increase tax filing, particularly among individuals who pr...