Q:

Explaining unknown person found in family listing in 1940 Federal Census of Iowa?

the 1940 federal census record for my dad's family is 100% accurate for the entire family - names spelled correctly, ages correctly listed - for 2 parents and their 4 children. But the census also lists a 5th sibling, said to have been born in 1936, and so listed as being 4 years old at the time of the census.  I have not provided you with names because I know you don't publish personal info, but the census also provides the 4 year old's name.  My dad and all his living siblings say no such 5th sibling ever existed and say they know nothing about him.  I have briefly searched for IA (where they lived) birth certificates and found nothing.  No cousins by the listed name apparently existed.  The father of the household worked on the railroad so if a 5th child did exist, he could have been born outside of IA.  
Can you offer any insights, or suggestions of sources I could check?  
Are errors like this - adding an entire person, not just a typo or spelling mistake - in census data common?  

A:

Here are the questions that I would investigate, that might help determine who this extra household member was:

Have you looked at the census page image to verify it was indexed correctly? This is the most frequent issue.
Are there any notes in the margin beside this entry, that point to another page or another family? Indexers almost always ignore these, leading to annoying household mashups or random individuals not attached to the correct household.
Is the household's informant marked (specific to 1940 US census)? If it was a parent, they should know who they are giving information on, although errors can be introduced by the enumerator or later copyists.
Is all the information for the individual consistent with the rest of the family?
Is this 5th child listed after the rest of the family? Are the ages all in sequence? 
Is it possible biologically (mother's age, intervals between pregnancies, etc.) for this individual to be a child of the family? 
You've looked for birth certificates: what about death certificates? A 4 year old with older siblings shouldn't have been forgotten, but an early death should be checked
You have already investigated possible cousins: could it have been a child's friend or neighbour's child over for a sleepover or for babysitting? It does happen that surnames are sometimes applied across the whole household in error. The relationship should be indicated, but that's any easy error to introduce.
Not possible (yet) in this case, but if there had been an later census (state or federal) or the child older, I would also check the family in other censuses to see if the individual was still with them. I've seen lodgers become foster children become adopted children. And orphaned children raised by grandparents or other relatives.

