Government says EITC claims filed with additional due diligence are more accurate than claims without it

September 21, 2015

recent government report validated much of what H&R Block has championed for the past few years: Taxpayers who do not receive detailed guidance to claim the Earned Income Tax Credit (EITC) are 34 times more likely to make an error in claiming the credit. These errors could lead to delayed refunds or billions of dollars of improper payments.

Almost 60 percent of taxpayers – those who seek assistance from a paid preparer – benefit from additional EITC due diligence questions to claim the tax credit while the 40 percent who self prepare have no such support.

A large tax software provider has indicated ensuring an accurate tax return with additional due diligence produces undue burden. In fact, in 2015, approximately 14 million taxpayers did answer the additional due diligence questions and gained a significantly reduced error rate as found by the Treasury Inspector General for Tax Administration (TIGTA). Even 9 out of 10 consumers surveyed believe that everyone should have to answer the same questions regardless of how they file their tax returns.

The EITC can mean more than $6,000 to a family of four so everyone should want to get it right. Plus, with approximately $20 billion annually paid out to fraudulent returns or those who just don’t understand the rules, this important credit is at risk. That’s why H&R Block works hard to protect the credit and to help our clients who qualify for the EITC claim every penny they deserve.

It is past time for the IRS and Treasury to implement this common sense solution – require all taxpayers to be treated equally when it comes to claiming the EITC.

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