Reporting of zero/low income by applicants for Basic Educational Opportunity Grants (BEOGs) was studied, with attention to the extent that such reporting was inaccurate. The BEOG applicant database was studied to gain understanding of the characteristics of those who report zero-income on Basic Grant applications. A random sample of 400,000 BEOG 1978-1979 applicants was analyzed. To determine the accuracy of 1976-1977 applicants' reporting of zero-income to BEOG, comparisons were made with 1976 tax data of the Internal Revenue Service (IRS). Discrepancies in adjusted gross income and eligibility indices that result from IRS data substitution were examined. Of particular concern was the accuracy of BEOG-reported data by dependency status, income level, and applicant category (all applicants, eligible applicants, and eligibles with farm or business assets). In addition, records for 9,005 applicants selected for validation during 1977-1978 were studied to identify additional characteristics of zero-income applicants, their accuracy, and the causes of misreporting. (SW)