Hafa Adai,
Attached is a press release from the Department of Revenue and Taxation on efforts to reduce EITC abuse. The press release is attached and the verbiage is also below for your convenience.
December 12, 2016 — REV & TAX TO CONTINUE EFFORTS TO REDUCE EITC ABUSE The Guam Department of Revenue and Taxation has been auditing tax returns with Earned Income Tax Credit (EITC) claims and is moving aggressively as part of the effort to eliminate fraud.  This effort has been stepped up with the hiring of Attorneys to assist Rev & Tax. For tax year 2014 alone, we paid out $132 million in tax refunds, and of that about $58 million or 40 percent was for EITC. Unlike U.S. states, Guam is not given federal money to pay out EITC. This $58 million has been paid for by our local taxpayers — this happens year after year. Rev & Tax officials have noticed, like their counterparts at the IRS, the increasing number of EITC claims and its impact.  This year, the IRS announced that they too would become more aggressive in auditing EITC claims. They said it would delay payments of EITC or ACTC related returns until Feb. 15. While Guam does mirror IRS tax code, this is NOT a policy that will impact us partly because DRT is already aggressively auditing AND the federal government doesn’t pay EITC. On Guam, EITC is paid out of local taxpayers’ wallets. There has been an ongoing effort to have the federal government pay for EITC.   In Fiscal Year 2016, DRT sent 552 audit notices to tax filers who claimed EITC. That represents about 2.8 percent of EITC claims. IRS typically audits about 1.8 percent of EITC claims filed with them.  INCOME TAX RETURNS AUDITED  In 2006, the Government of Guam paid out $6.2M for EITC. That number of people along with the amounts of EITC paid out has skyrocketed to $55M in 2015 — and late filers’ tax returns are still being processed. The percentage of EITC it went from a fraction of the cost of tax refunds to nearly half. Since tax year 2010, the Government has paid out more than $317.7M in EITC.

2010 $44,947,582.00 17949 1.4 $630,848.00 1.4 253
2011 $50,124,343.00 19663 2.7 $1,353,882.00 2.6 521
2012 $55,039,731.00 20920 2.0 $1,124,253.00 2.0 419
2013 $59,043,661.00 21901 2.7 $1,582,492.00 2.6 572
2014 $58,225,304.00 21274 2.3 $1,366,833.00 2.3 496
2005 $23,912,404 11618
2006 $28,488,393 13621
2007 $37,934,875 16261
2008 $37,330,797 16393
2009 $44,884,082 17995
2010 $44,753,454 17885
2011 $50,028,029 19622
2012 $54,720,616 20757
2013 $58,324,727 21496
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