Papers Containing Keywords(s): 'irs'
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Viewing papers 41 through 50 of 51
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Working PaperDo Doubled-up Families Minimize Household-level Tax Burden?
September 2014
Working Paper Number:
carra-2014-13
This paper examines a method of tax avoidance not previously studied: the sorting of dependent children among related filers who have 'doubled up' in a household for economic reasons. Using the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) linked with 1040 data from the Internal Revenue Service (IRS), we examine households with children and at least two adult tax filers to determine whether the household minimizes income tax burden, and thus maximizes refunds, by optimally claiming dependents. We examine specifically the relationship between the Earned Income Tax Credit (EITC) and the sorting of dependent children among filers in households. We find the following: The propensity to sort increases as the number of filers who are potentially eligible for the EITC increases; sorting probability increases as the optimal household EITC amount increases; and among households with at least one EITC-eligible filer, the propensity to sort increases as the difference between modeled household EITC amount and the optimal amount increases. We also exploit the 2009 change in EITC benefit for families with three or more children, finding that the propensity to sort to exactly three children increased among EITC-eligible filers after the rule change. The results of this analysis improve our understanding of filing behavior, particularly how households form filing units and pool resources, and have implications for poverty measurement in complex households This presentation was given at the CARRA Seminar, July 16, 2014View Full Paper PDF
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Working PaperChanges in EITC Eligibility and Participation, 2005'2009
July 2014
Working Paper Number:
carra-2014-04
The rate of participation in the Earned Income Tax Credit (EITC) has been widely studied, but changes over time in eligibility for the credit have received less attention. One question of importance to policy-makers is whether (or by how much) eligibility might increase during economic downturns. The EITC is fundamentally tied to work. During periods of high unemployment, eligibility may decrease due to a lower number of workers - especially low-skilled workers - filing for a given tax year. On the other hand, family structure and underemployment may lead to increases in eligibility. For example, earners may become eligible when a two-earner family loses one job or when an earner works part of the year or fewer hours. Using IRS tax data linked with the Current Population Survey Annual Social and Economic Supplement (CPS ASEC), I examine changes in EITC eligibility and take-up between tax years 2005 and 2009, during which time the Great Recession began and ended. Employing fixed-effects models, I assess patterns of eligibility among demographic groups based on characteristics that also predict labor market outcomes. Results indicate that, in a period when overall EITC eligibility rates increased, the state unemployment rate had a significant positive effect on eligibility and a significant negative effect on take-up. Meanwhile, although joint filers, those with more children, and men experienced increasing rates of eligibility, those with less education experienced decreasing rates. Results point to the possibility that labor market groups who experienced the highest rates of unemployment in the recession may have become ineligible due to full-year job loss.View Full Paper PDF
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Working PaperThe Person Identification Validation System (PVS): Applying the Center for Administrative Records Research and Applications' (CARRA) Record Linkage Software
July 2014
Working Paper Number:
carra-2014-01
The Census Bureau's Person Identification Validation System (PVS) assigns unique person identifiers to federal, commercial, census, and survey data to facilitate linkages across and within files. PVS uses probabilistic matching to assign a unique Census Bureau identifier for each person. The PVS matches incoming files to reference files created with data from the Social Security Administration (SSA) Numerical Identification file, and SSA data with addresses obtained from federal files. This paper describes the PVS methodology from editing input data to creating the final file.View Full Paper PDF
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Working PaperEARNINGS ADJUSTMENT FRICTIONS: EVIDENCE FROM SOCIAL SECURITY EARNINGS TEST
September 2013
Working Paper Number:
CES-13-50
We study frictions in adjusting earnings to changes in the Social Security Annual Earnings Test (AET) using a panel of Social Security Administration microdata on one percent of the U.S. population from 1961 to 2006. Individuals continue to "bunch" at the convex kink the AET creates even when they are no longer subject to the AET, consistent with the existence of earnings adjustment frictions in the U.S. We develop a novel framework for estimating an earnings elasticity and an adjustment cost using information on the amount of bunching at kinks before and after policy changes in earnings incentives around the kinks. We apply this method in settings in which individuals face changes in the AET bene.t reduction rate, and we estimate in a baseline case that the earnings elasticity with respect to the implicit net-of-tax share is 0.23, and the .xed cost of adjustment is $152.08.View Full Paper PDF
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Working PaperAn Analysis of Sample Selection and the Reliability of Using Short-term Earnings Averages in SIPP-SSA Matched Data
December 2011
Working Paper Number:
CES-11-39
In this paper, we document the extent to which the sample of the Survey of Income and Program Participation that is matched to the Social Security Administration's administrative earnings records is nationally representative. We conclude that the match bias is small, so selection is not a serious concern. The matched sample over-represents individuals who are wealthy, who have financial assets or who have received a government-transfer and under-represents individuals who attrited from the SIPP. We use this matched sample to examine the relationship between short-term averages of earnings from the SIPP earnings and average lifetime earnings from the administrative records. Our estimates suggest that using short averages of earnings may understate the effects of permanent income on particular outcomes of interest.View Full Paper PDF
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Working PaperEstimating Measurement Error in SIPP Annual Job Earnings: A Comparison of Census Bureau Survey and SSA Administrative Data
July 2011
Working Paper Number:
CES-11-20
We quantify sources of variation in annual job earnings data collected by the Survey of Income and Program Participation (SIPP) to determine how much of the variation is the result of measurement error. Jobs reported in the SIPP are linked to jobs reported in an administrative database, the Detailed Earnings Records (DER) drawn from the Social Security Administration's Master Earnings File, a universe file of all earnings reported on W-2 tax forms. As a result of the match, each job potentially has two earnings observations per year: survey and administrative. Unlike previous validation studies, both of these earnings measures are viewed as noisy measures of some underlying true amount of annual earnings. While the existence of survey error resulting from respondent mistakes or misinterpretation is widely accepted, the idea that administrative data are also error-prone is new. Possible sources of employer reporting error, employee under-reporting of compensation such as tips, and general differences between how earnings may be reported on tax forms and in surveys, necessitates the discarding of the assumption that administrative data are a true measure of the quantity that the survey was designed to collect. In addition, errors in matching SIPP and DER jobs, a necessary task in any use of administrative data, also contribute to measurement error in both earnings variables. We begin by comparing SIPP and DER earnings for different demographic and education groups of SIPP respondents. We also calculate different measures of changes in earnings for individuals switching jobs. We estimate a standard earnings equation model using SIPP and DER earnings and compare the resulting coefficients. Finally exploiting the presence of individuals with multiple jobs and shared employers over time, we estimate an econometric model that includes random person and firm effects, a common error component shared by SIPP and DER earnings, and two independent error components that represent the variation unique to each earnings measure. We compare the variance components from this model and consider how the DER and SIPP differ across unobservable components.View Full Paper PDF
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Working PaperRecent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data
September 2009
Working Paper Number:
CES-09-26
Although the vast majority of US research on trends in the inequality of family income is based on public-use March Current Population Survey (CPS) data, a new wave of research based on Internal Revenue Service (IRS) tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates can largely be reconciled once one uses internal CPS data (which better captures the top of the income distribution than public-use CPS data) and defines the income distribution in the same way. Using internal CPS data for 1967'2006, we closely match the IRS data-based estimates of top income shares reported by Piketty and Saez (2003), with the exception of the share of the top 1 percent of the distribution during 1993'2000. Our results imply that, if inequality has increased substantially since 1993, the increase is confined to income changes for those in the top 1 percent of the distribution.View Full Paper PDF
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Working PaperA Comparison of Employee Benefits Data from the MEPS-IC and Form 5500
September 2008
Working Paper Number:
CES-08-32
This paper compares data on employers\u2019 health and pension offerings from the two sources: publicly available administrative data from Form 5500 filings and survey data from the Insurance Component of the Medical Expenditure Panel Survey (MEPS-IC). The basic findings are that the 5500 filings cover too few health plans to be very useful as a substitute or supplement to the MEPS-IC measure of whether or not employers offer health insurance. The pension information in the 5500 filings is potentially more useful as a supplement to the MEPSIC for research purposes where additional pension information would be useful in studying employers\u2019 decisions to offer health insurance.View Full Paper PDF
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Working PaperDescribing the Form 5500-Business Register Match
January 2003
Working Paper Number:
tp-2003-05
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Working PaperNew Uses of Health and Pension Information
January 2002
Working Paper Number:
tp-2002-03
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