The EITC Earned income tax Credit is subject to more fraud and waste than any other taxpayer funded Govt program for the poor and that is saying a LOT.
As many as 80% of AEITC recipients did not comply with at least one of the program requirements GAO reviewed, and some were noncompliant with more than one during the 3 years we reviewed. In tax years 2002 through 2004, about 20%, or more than 100,000 AEITC recipients, may not have been eligible for the AEITC because they had an invalid Social Security number. These individuals received a total of $37 million to $39 million each year. Almost 40% (about 200,000 recipients) did not file the required tax return; these individuals received $42 million to $50 million each year. Of the about 60% (more than 300,000) AEITC recipients who did file a return, about two-thirds misreported the amount received.