IRS to toughen-up on tax credits.

• Position: National

The IRS will conduct an in-depth review of returns on which taxpayers claim Earned Income Tax Credits (EITC) and Health Coverage Tax Credits (HCTC). Last year, only a fraction of the 20 million Americans who filed for tax credits were found to actually qualify for the credits.

The IRS will review EITC claims to determine their legitimacy using a three prong test to:

* Certify the residency of qualifying children.

* Check filing status qualification of the taxpayer.

* Confirm documentation of income.

The IRS will also closely monitor Health Coverage Tax Credits. Only two groups of people qualify for this tax credit--people covered by the...