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No Kidding

August 22, 1986

A lot of tax filers, it seems, don't believe in getting their children the old-fashioned way. Instead, they invent them. The Internal Revenue Service estimates that each year 8.3 million non-existent children are falsely claimed as dependents on tax returns. Each of those phony personal-exemption claims costs the Treasury money that it is properly owed. The new tax bill that Congress will vote on next month has a provision that seeks to end that abuse. It should recover billions in lost revenues.

Beginning in 1988, all tax returns would have to carry a Social Security number for each claimed dependent who is 5 years old or older. What that means is that most children, about the time they enter school, would have to be on the Social Security Administration's rolls. The purpose is to give the IRS an easy means to cross-check exemption claims. That would be likely to reduce severely claims that are now made for fictitious dependents, self-supporting children and--yes, some people try it--household pets.

Would this new step in any way threaten personal liberties, privacy or the sanctity of the home? Hardly. It would simply accelerate a process. Any teen-ager who works must have a Social Security number. So must any toddler who has a bank account for squirreling away birthday money. Already 205 million of the nation's 240 million people have active Social Security accounts. The new plan would see about 9 million more enrolled.

The proposed increase in the personal exemption, from $1,080 this year to $1,950 in 1988, could tempt additional cheating on tax returns by those inclined to do so. The IRS figures that it could recover well over $5 billion a year in tax under-payments with its proposal. To avoid swamping Social Security offices with new registrations, the provision wouldn't take effect until returns for 1987 are filed. That's reasonable enough. But, given the magnitude of the cheating that occurs, why wasn't this simple idea adopted long ago?

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