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Financial Planning / Tax Strategies
|Subject: Re: The Cost Basis Crisis||Date: 6/30/2006 11:35 PM|
|Author: DBAVelvet74||Number: 87630 of 125866|
In the first year SSN's were required something like 25 million dependents disappeared from returns.
It was more like 7 million.
One interesting side note on that:
Alternative explanations might account for a substantial portion of the drop in number of claimed dependents, though. For example, it was not until 1987 that the IRS first demonstrated a program to allow parents to automatically obtain Social Security numbers for their newborn children when those births were registered, and the program did not become nationwide until 1989. Since the average citizen doesn't generally keep abreast of all the changes made to tax code from year to year until they directly affect him, perhaps many taxpayers sat down to fill out their returns in 1987 and didn't realize until it was too late that they had never applied for Social Security numbers for their children.
It would be informative to examine data including the total number of dependents claimed on federal tax returns in the years before and after 1987 to determine whether there was a large, unrecovered decrease in 1987 (indicative of widespread cheating), or whether the decline was only temporary and the numbers climbed back to something approaching their pre-1987 levels in 1988 and 1989 (indicative of administrative problems), but we haven't been able to obtain this information yet, so for now we can only hypothesize.
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