Tax Filing and Take-Up: Experimental Evidence on Tax Preparation Outreach and EITC Participation
34 Pages Posted: 1 Feb 2021 Last revised: 4 Feb 2023
Date Written: January 2021
Abstract
Governments and non-profits devote substantial resources to increasing take-up of the Earned Income Tax Credit (EITC) through educational outreach. We study a different approach: policies that encourage tax filing. In a large field experiment, we find that IRS letters about free tax preparation modestly increased filing, with a large share of the new filers claiming the EITC. The results suggest policies that increase filing can be an effective way to increase take-up of tax-administered social benefits, even policies that do not raise awareness or directly target the benefit in other ways.
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