The testimony discusses current statistics on tax evasion, the argument for trying to stem it, and why IRS efforts so far have been disappointing. It then focuses on specific issues related to the earned income tax credit (EITC). The testimony concludes that, while deterring system-wide tax evasion should be a high priority, the approach of targeting EITC recipients for intrusive pre-audits represents a poor use of limited compliance resources and threatens to undermine a highly effective program.