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snopes
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Comment: I had read at some point that 90 million children dropped off the
1040 forms the year that the IRS required social security numbers. This
seems incredibly high, but I know that it was a fact that there had been a
lot of pets and divorced parents both claiming children. Do you have any
information regarding this fact.

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Zorro
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I didn't know pets had to fill out tax returns. [lol]

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Squishy0405
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If it's true I need to refile as my cat claiming me...shes the true head of household [Big Grin]

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wanderwoman
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The 90 million claim comes from the book Freakonomics. I recently finished reading it, but I did not check the author's sources to see how he got the numbers.

The book said nothing about pets, however. My dog may be in trouble...as far as I know he's never filed a tax return.

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RubyMoon
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How many of those 90 thousand dropped off as dependents simply because they were too old that year to be dependents, or because they had gotten full time jobs, or gotten married. My brothers 2 kids dropped off his tax return not because he was cheating but because one of them graduated and was making enough to file his own return, and the other one got married and was had to file to claim his own dependent wife and child. I'm also sure that a number of children died that year for one reason or another, from SIDs to accidents. So basically I'd have to know exactly how much other reasearch was done, other than the bald fact that 90 million children disappeared from tax returns that year.

Also, how many actual tax returns were filed that year. Are they saying 5 perscent of the taxpayers were cheating, 20 percent, 75 percent or what. Just a bald face number like that doesn't really mean anything unless you know the full context.

Also define what you mean a lot of people claiming pets. And how do you know -- personally, or because of some romour that you read or heard.

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uselessmetaphor
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Do they mean step parents? Or am I just incredibly dense and don't get it? o_0
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wanderwoman
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If the reference in the OP is to the Freakonomics claim, the author was stating that the 90 million were cases in which children were being claimed who should not have been until the IRS required a social security number for each child. This could be due to a number of different reasons, from claims for non-existant children to duplicate claims of the deduction by divorced parents.

I think that kind of tax fraud was probably more likely before the requirement of social security numbers than it is now, it's the number of false claims that I am not sure about.

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Four Kitties
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I think the premise is this:

- It used to be that you didn't need to apply for a SSN until you needed one, for job or tax purposes. I didn't get a SSN until I was 14, since before that I didn't have a job or file a tax return.

- My brother and I were still listed as dependents on my parents' tax returns before we had SSNs.

- SSNs are now required in order to claim a dependent over 1 year of age on a tax return (don't know when that requirement started -- I do know that the application for the Kitten's SSN was included in the package of paperwork I got at the hospital when she was born, along with birth certificate stuff).

I believe the question in the OP is: "Is it true that before SSNs were required for dependents, there were 90 million fake kids or pets listed as dependents on tax returns, which fraud was prevented by requiring SSNs for anyone claimed as a dependent on tax returns, resulting in 90 million fewer dependents once that requirement was implemented?"

ETA: Spanked by wanderwoman

Four Kitties

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wanderwoman
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Ok, just looked it up on Amazon because I suddenly realized I was not sure of the numbers and I took the book back to the library. The claim made by the author in Freakonomics was 7 million. So the OP was way wrong and I just followed suit because I remember the theory but not the specific number.

Don't bother, I'll get it. [fish]

Sorry.

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Signora Del Drago
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Kitties, I don't know exactly when the requirement started, either, but it was in the mid 1980s. When I worked at the local library, parents would come in to get a library card for their very young children because the children had to have more than one ID to get a SSN. Go figure. How many babies and young children had any kind of ID other than a birth certificate at that time?

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Four Kitties
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That's very odd, SDD, since the Social Security Administration only requires a birth certificate for children under 12.

Four Kitties

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Signora Del Drago
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quote:
Originally posted by Four Kitties:
That's very odd, SDD, since the Social Security Administration only requires a birth certificate for children under 12.

Four Kitties

I do know that parents in the mid 1980s got library cards for their young children in order to be able to have sufficient ID to obtain a SSN for them because two IDs were required, and the only ID most parents had for their children were birth certificates. Thinking perhaps there had been changes, I used your link and linked to the following. (Italics mine.)
~~~~~~~~~~~~~~~~~~~~~~~~~
http://www.ssa.gov/pubs/10023.html was updated last in Dec. 2005.
quote:
Must my child have a Social Security number?
No. Getting a Social Security number for your newborn is voluntary. But, it is a good idea to get a number when your child is born. You can apply for a Social Security number for your baby when you apply for your baby’s birth certificate. The state agency that issues birth certificates will share your child’s information with us and we will mail the Social Security card to you.

If you wait to apply at a Social Security office, you must show us proof of your child’s U.S. citizenship, age and identity, as well as proof of your own identity. We must verify your child’s birth record, which can add up to 12 weeks to the time it takes to issue a card. To verify a birth certificate, Social Security will contact the office that issued it. We do this verification to prevent people from using fraudulent birth records to obtain Social Security numbers to establish false identities.

quote:
How do I apply?
At the hospital: When you give information for your baby’s birth certificate, you will be asked whether you want to apply for a Social Security number for your baby. If you say “yes,” you need to provide both parents’ Social Security numbers if you can. Even if you do not know both parents’ Social Security numbers, you can still apply for a number for your child.

At a Social Security office: If you wait to apply for your child’s number, you must:

Complete an Application For A Social Security Card (Form SS-5); and
Show us original documents proving your child’s:
U.S. citizenship;
Age; and
Identity.
Show us documents proving your identity.
Children age 12 or older: Anyone age 12 or older requesting an original Social Security number must appear for an interview at a Social Security office, even if a parent or guardian will sign the application on the child's behalf.

quote:
Identity
Your child: We can accept only certain documents as proof of your child’s identity. An acceptable document must be current (not expired) and show your child’s name, identifying information and preferably a recent photograph. We generally can accept a non-photo identity document if it has enough information to identify the child (such as the child’s name and age, date of birth or parents’ names). We prefer to see the child’s U.S. passport. If that document is not available, we may accept the child’s:

Adoption decree;
Doctor, clinic or hospital record;
Religious record (e.g., baptismal record);
Daycare center or school record; or
School identification card.
You: If you are a U.S. citizen, Social Security will ask to see your U.S. driver’s license, state-issued nondriver identification card or U.S. passport as proof of your identity. If you do not have these specific documents, we will ask to see other documents that may be available, such as:
.
.
.
. . .Or, we may use your child’s birth certificate as proof of age and citizenship. However, you must provide at least two separate documents.

~~~~~~~~~~~~~~~~~~~~~~~~~
It appears that the requirements are still the same.

I didn't see where a birth certificate is only required for a child under 12 but may have missed that statement. I did see that a child over 12 is required to appear in person.

It is also stated that two separate documents must be provided, one of which may be a birth certificate.

A library card would be acceptable, at least in Oklahoma, because children under a certain age here are issued a card which also lists the name of a parent. It was weird, to me anyway, to issue a library card to a six-month-old baby. [Roll Eyes]

Of course, it would be so much simpler to apply for the child's SSN at the time of birth through the hospital, but there were many children who already existed at the time this law was enacted. The parents of those children had to obtain another ID for those children to accompany the birth certificate when applying for the SSN.

Cheers!

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"Give people a break. It's not easy doing a life."~Joshua Halberstam

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Four Kitties
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SDD, I found the source of my confusion (see the bolded/italicized bits below).
quote:
Documents Required for a Social Security Card (original, child, under age 12):

Regardless of age, anyone physically and mentally capable may sign an Application For A Social Security Card. To apply for a Social Security number:

- Complete an Application For A Social Security Card (Form SS-5); and
- Show us documents proving your child’s:
--U.S. citizenship;
--Age; and
--Identity.
--Show us proof of your identity.
--Take your completed application and documents to your local Social Security office .

Anyone age 12 or older requesting an original Social Security number card must appear for an interview at a Social Security office.

Social Security must verify a birth record for all U.S.-born applicants who apply for an original Social Security number. An exception is made for a parent who applies for a baby’s Social Security number at the hospital when the baby is born. To verify a birth record, Social Security will contact the office that issued it.

Adoption: We can assign your adopted child a number before the adoption is complete, but you may want to wait. Then, you can apply for the number using your child’s new name. If you want to claim your child for tax purposes while the adoption is still pending, contact the Internal Revenue Service for Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions. For more information, see Social Security Numbers For Children (Publication No. 05-10023).

Citizenship

We can accept only certain documents as proof of U.S. citizenship. These include a U.S. birth certificate, U.S. consular report of birth, U.S. passport, Certificate of Naturalization or Certificate of Citizenship.

Age

You must present your child’s birth certificate if you have it or can easily obtain it. If not, we can consider other documents, such as your child’s passport to prove age.

Identity

Your child: We can accept only certain documents as proof of your child’s identity. An acceptable document must be current (not expired) and show your child’s name, identifying information and preferably a recent photograph. We generally can accept a non-photo identity document if it has enough information to identify the child (such as the child’s name and age, date of birth or parents’ names). We prefer to see the child’s U.S. passport. If that document is not available, we may accept the child’s:

- Adoption decree;
- Doctor, clinic or hospital record;
- Religious record (e.g., baptismal record);
- Daycare center or school record; or
- School identification card.

You: We also must see proof of your identity. An acceptable document must be current (not expired) and show your name, identifying information (date of birth or age) and preferably a recent photograph. For example, as proof of identity Social Security must see your:

- U.S. driver’s license;
- State-issued nondriver identification card; or
U.S. passport.

If you do not have one of these specific documents or you cannot get a replacement for one of them within 10 days, we will ask to see other documents, including:

- Employee ID card;
- School ID card;
- Health insurance card (not a Medicare card);
- U.S. military ID card; or
- Adoption decree.

We may use one document for two purposes. For example, we may use your U.S. passport as proof of both citizenship and identity. However, you must provide at least two separate documents.

Two documents are required if you don't apply at birth, but only one is required if you do; I certainly don't remember (if I ever knew) what docs my folks used when they applied for my card. I do not remember visiting the SSA office to appear in person either, even though I was 14 or so, but I suppose it could have happened and I've somehow forgotten that momentous event [Wink] . Or perhaps the "appear in person" bit was implemented later. In any case, you are undoubtedly correct about folks using library cards for ID back in the day. My apologies.

Four Kitties

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Signora Del Drago
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Ees okay, Kitties. I learned a lot by doing that research. I should have done it in the first place and not just submitted anecdotal evidence. Mea culpa.

The law may have been changed to require personal appearance after you received your SSN. As an aside, my granddaughter was supposed to appear in person to get a passport. She was in PA, her mother was in CO. Her mother was able to obtain the passport for her. She was 15 at the time. I never have been able to figure that one out!

Cheers!

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"This air we're breathing. Oxygen, isn't it?"~I’mNotDedalus, impersonating Vincent D’Onofrio.|"Sometimes trying to communicate can be like walking through a minefield."~wanderwoman
"Give people a break. It's not easy doing a life."~Joshua Halberstam

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snopes
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Here's the underlying source from which the Freakonomics authors derived the statistic:

http://www.ksg.harvard.edu/jeffreyliebman/ntjeitc.pdf

This National Tax Journal article itself draws its information about the 7 million figure from a 1991 IRS report which I haven't found available on-line yet; it doesn't sound to me like the Freakonomics authors consulted that report either.

In any case, the National Tax Journal article states that in 1987, the first year in which taxpayers were required to list the SSNs of their dependents, 7 million fewer dependent children were claimed than in the previous year.

It then provides some evidence that much of that decrease may have been due to taxpayers cheating by claiming non-existent children:

quote:
Further evidence that nonexistent children may have been claimed comes from the 1988 TCMP (Taxpayer Compliance Measurement Program). In 1988, taxpayers were required to list on their tax returns the social security numbers of all dependents who were at least five years old. On
tax returns where the TCMP auditor disallowed an EITC (Earned Income Tax Credit) claim, 39 percent of the disallowed dependent child claims were dependents for whom the taxpayer checked the box stating the child was under five and did not provide a social security number -- possibly because the children did not exist.

- snopes
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snopes
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It's interesting to note that the SSA's number chronology has this entry for 1987:

quote:
SSA initiated a demonstration project on August 17 in the State of New Mexico enabling parents to obtain Social Security numbers for their newborn infants automatically when the infant's birth was registered by the State. The program was expanded nationwide in 1989.
So, it's possible that a good portion of the drop in dependent children listed on 1987 tax returns might have been because those children did in fact exist, but their parents hadn't yet obtained Social Security numbers for them. It would be interesting to see data about the number of dependent children claimed on tax returns in the years before and after 1987 to determine whether there was a large, permanent drop that year, or just a temporary decline followed by significant increases in the succeeding years.

- snopes

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wanderwoman
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Excellent point, snopes! I hadn't thought about that aspect of it. Interesting that the author of Freakonomics jumped to the conclusion of widespread tax fraud rather than difficulty in meeting the new requirements.

Freakonomics was an interesting book but I read it with a fair amount of skepticism. I think the author, to a certain extent, is using his expertise to play into his audience's interest in counterintuitive conclusions. There was also a discussion in the book about cost-benefit ratios of some types of safety regulations that I thought was a bit too pat in its conclusions.

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snopes
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quote:
How many of those dropped off as dependents simply because they were too old that year to be dependents, or because they had gotten full time jobs, or gotten married.
Without checking the stats, I would guess that the number of children who reached the age of majority in 1986-87 (or were disqualified as dependents for other reasons) was more than offset by the increase due to births and immigration during that same period.

- snopes

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RubyMoon
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How many fewer dependents were claimed the year after compaired to the year in question, how about the year before, or any other year. I am not saying there was not tax fraud, I'm saying that I don't beleive it was that wide spread.
I know dozens of crazy cat ladies (I am one myself) and none of us ever claimed our cats as dependents.

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Four Kitties
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quote:
Originally posted by RubyMoon:
I know dozens of crazy cat ladies (I am one myself) and none of us ever claimed our cats as dependents.

But we should! [Wink] I could have taken the itemized medical deduction this year....

Four Kitties

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Dixie Chick
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I worked at H&R Block for several years and can definitely believe there were many "fake" children or children claimed more than once.

I say this because, even though a social security number is now required, fraud is still rampant. Now it is just more difficult in that you must "purchase" or "borrow" a child's SSN from someone who doesn't need anymore kids to increase their earned income credit. If a SSN is used twice, the 2nd return is rejected and then the IRS will require proof from both parties to find out who really should be claiming the dependent.

Of course, the IRS audits every so often and may make a person prove that they are in fact providing support for the children they claimed by requiring school or medical records.

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