H.R. 556: Refundable Child Tax Credit Eligibility Verification Reform Act of 2013

113th Congress, 2013–2015. Text as of Feb 06, 2013 (Introduced).

Status & Summary | PDF | Source: GPO and Cato Institute Deepbills

I

113th CONGRESS

1st Session

H. R. 556

IN THE HOUSE OF REPRESENTATIVES

February 6, 2013

introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to require individuals to include their social security numbers on the income tax return as a condition of claiming the refundable portion of the child tax credit, and for other purposes.

1.

Short title

This Act may be cited as the Refundable Child Tax Credit Eligibility Verification Reform Act of 2013 .

2.

Social security number required to claim the refundable portion of the child tax credit

(a)

In general

Subsection (d) of section 24 of the Internal Revenue Code of 1986 is amended by inserting after paragraph (4) the following new paragraph:

(5)

Identification requirement with respect to taxpayer

(A)

In general

Paragraph (1) shall not apply to any taxpayer for any taxable year unless the taxpayer includes the taxpayer's social security number on the return of tax for such taxable year.

(B)

Joint returns

In the case of a joint return, the requirement of subparagraph (A) shall be treated as met if the social security number of either spouse is included on such return.

(C)

Limitation

Subparagraph (A) shall not apply to the extent the tentative minimum tax (as defined in section 55(b)(1)(A)) exceeds the credit allowed under section 32.

.

(b)

Omission treated as mathematical or clerical error

Subparagraph (I) of section 6213(g)(2) of such Code is amended to read as follows:

(I)

an omission of a correct social security number required under section 24(d)(5) (relating to refundable portion of child tax credit), or a correct TIN under section 24(e) (relating to child tax credit), to be included on a return,

.

(c)

Conforming amendment

Subsection (e) of section 24 of such Code is amended by inserting With Respect to Qualifying Children after Identification Requirement in the heading thereof.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

3.

Restrictions on taxpayers who improperly claimed refundable portion of the child tax credit in prior year

(a)

In general

Subsection (d) of section 24 of the Internal Revenue Code of 1986 is amended by inserting after paragraph (5) the following new paragraph:

(6)

Restrictions on taxpayers who improperly claimed credit in prior year

(A)

Taxpayers making prior fraudulent or reckless claims

(i)

In general

No credit shall be allowed under this subsection for any taxable year in the disallowance period.

(ii)

Disallowance period

For purposes of clause (i), the disallowance period is—

(I)

the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this subsection was due to fraud, and

(II)

the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this subsection was due to reckless or intentional disregard of rules and regulations (but not due to fraud).

(B)

Taxpayers making improper prior claims

In the case of a taxpayer who is denied credit under this subsection for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no credit shall be allowed under this subsection for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit.

.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

4.

Checklist for paid preparers to verify eligibility for refundable portion of the child tax credit; penalty for failure to meet due diligence requirements

(a)

In general

The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe a form (similar to Form 8867) which is required to be completed by paid income tax return preparers in connection with claims for the refundable portion of the child tax credit under section 24(d) of the Internal Revenue Code of 1986.

(b)

Penalty

Section 6695 of the Internal Revenue Code of 1986 (relating to other assessable penalties with respect to the preparation of tax returns for other persons) is amended by adding at the end the following new subsection:

(h)

Failure To be diligent in determining eligibility for refundable portion of child tax credit

Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with due diligence requirements imposed by the Secretary by regulations with respect to determining eligibility for, or the amount of, the credit allowable by section 24(d) shall pay a penalty of $500 for each such failure.

.

(c)

Effective date

The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.