I 

111TH CONGRESS 

2D SESSION H. R. 5693 

To provide additional protections for recipients of the earned income tax 

credit and the child tax credit. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 1, 2010 

Ms. LEE of California (for herself, Ms. SCHAKOWSKY, Ms. NORTON, Mr. 

SERRANO, Mr. FILNER, Mr. STARK, Ms. WOOLSEY, Mr. ELLISON, and 

Mr. GRIJALVA) introduced the following bill; which was referred to the 

Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To provide additional protections for recipients of the earned 

income tax credit and the child tax credit. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Taxpayer Abuse Pre5 vention Act’’. 


pwalker on DSK8KYBLC1PROD with BILLS
2 

•HR 5693 IH

1 SEC. 2. PREVENTION OF DIVERSION OF EARNED INCOME 

2 TAX CREDIT AND CHILD TAX CREDIT BENE3 FITS. 

4 (a) EARNED INCOME.—Section 32 of the Internal 

5 Revenue Code of 1986 is amended by adding at the end 

6 the following new subsection: 

7 ‘‘(n) PREVENTION OF DIVERSION OF CREDIT BENE8 FITS.—The right of any individual to any future payment 

9 of the credit under this section shall not be transferable 

10 or assignable, at law or in equity, and such right or any 

11 moneys paid or payable under this section shall not be 

12 subject to any execution, levy, attachment, garnishment, 

13 offset, or other legal process except for any outstanding 

14 Federal obligation. Any waiver of the protections of this 

15 subsection shall be deemed null, void, and of no effect.’’. 

16 (b) CHILD TAX CREDIT.—Section 24 of such Code 

17 is amended by adding at the end the following new sub18 section: 

19 ‘‘(g) PREVENTION OF DIVERSION OF CREDIT BENE20 FITS.—The right of any individual to any future payment 

21 of the credit under this section shall not be transferable 

22 or assignable, at law or in equity, and such right or any 

23 moneys paid or payable under this section shall not be 

24 subject to any execution, levy, attachment, garnishment, 

25 offset, or other legal process except for any outstanding 


pwalker on DSK8KYBLC1PROD with BILLS
3 

•HR 5693 IH

1 Federal obligation. Any waiver of the protections of this 

2 subsection shall be deemed null, void, and of no effect.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall take effect on the date of the enactment 

5 of this Act. 

6 SEC. 3. PROHIBITION ON DEBT COLLECTION OFFSET. 

7 (a) IN GENERAL.—No person shall, directly or indi8 rectly, individually or in conjunction or in cooperation with 

9 another person, engage in the collection of an outstanding 

10 or delinquent debt for any creditor or assignee by means 

11 of soliciting the execution of, processing, receiving, or ac12 cepting an application or agreement for a refund anticipa13 tion loan or refund anticipation check that contains a pro14 vision permitting the creditor to repay, by offset or other 

15 means, an outstanding or delinquent debt for that creditor 

16 from the proceeds of the debtor’s Federal tax refund. 

17 (b) REFUND ANTICIPATION LOAN.—For purposes of 

18 subsection (a), the term ‘‘refund anticipation loan’’ means 

19 a loan of money or of any other thing of value to a tax20 payer because of the taxpayer’s anticipated receipt of a 

21 Federal tax refund. 

22 (c) EFFECTIVE DATE.—This section shall take effect 

23 on the date of the enactment of this Act. 


pwalker on DSK8KYBLC1PROD with BILLS
4 

•HR 5693 IH

1 SEC. 4. PROHIBITION OF MANDATORY ARBITRATION. 

2 (a) IN GENERAL.—Any person that provides a loan 

3 to a taxpayer that is linked to or in anticipation of a Fed4 eral tax refund for the taxpayer may not include manda5 tory arbitration of disputes as a condition for providing 

6 such a loan. 

7 (b) EFFECTIVE DATE.—This section shall apply to 

8 loans made after the date of the enactment of this Act. 

9 SEC. 5. TERMINATION OF DEBT INDICATOR PROGRAM. 

10 The Secretary of the Treasury shall terminate the 

11 Debt Indicator program announced in Internal Revenue 

12 Service Notice 99–58. 

13 SEC. 6. EXPANSION OF ELIGIBILITY FOR ELECTRONIC 

14 TRANSFER ACCOUNTS. 

15 (a) IN GENERAL.—The last sentence of section 

16 3332(j) of title 31, United States Code, is amended by 

17 inserting ‘‘other than any payment under section 32 of 

18 such Code’’ after ‘‘1986’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall apply to payments made after the date 

21 of the enactment of this Act. 

22 SEC. 7. PROGRAM TO ENCOURAGE THE USE OF THE AD23 VANCE EARNED INCOME TAX CREDIT. 

24 (a) IN GENERAL.—Not later than 6 months after the 

25 date of the enactment of this Act, the Secretary of the 

26 Treasury shall, after consultation with such private, nonVerDate Mar 15 2010 01:38 Jul 07, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5693.IH H5693

pwalker on DSK8KYBLC1PROD with BILLS
5 

•HR 5693 IH

1 profit, and governmental entities as the Secretary deter2 mines appropriate, develop and implement a program to 

3 encourage the greater utilization of the advance earned in4 come tax credit. 

5 (b) REPORTS.—Not later than the date of the imple6 mentation of the program described in subsection (a), and 

7 annually thereafter, the Secretary of the Treasury shall 

8 report to the Committee on Finance of the Senate and 

9 the Committee on Ways and Means of the House of Rep10 resentatives on the elements of such program and progress 

11 achieved under such program. 

12 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

13 authorized to be appropriated such sums as are necessary 

14 to carry out the program described in this section. Any 

15 sums so appropriated shall remain available until ex16 pended. 

17 SEC. 8. PROGRAM TO LINK TAXPAYERS WITH DIRECT DE18 POSIT ACCOUNTS AT FEDERALLY INSURED 

19 DEPOSITORY INSTITUTIONS. 

20 (a) ESTABLISHMENT OF PROGRAM.—Not later than 

21 1 year after the date of the enactment of this Act, the 

22 Secretary of the Treasury shall enter into cooperative 

23 agreements with federally insured depository institutions 

24 to provide low- and moderate-income taxpayers with the 


pwalker on DSK8KYBLC1PROD with BILLS
6 

•HR 5693 IH

1 option of establishing low-cost direct deposit accounts 

2 through the use of appropriate tax forms. 

3 (b) FEDERALLY INSURED DEPOSITORY INSTITU4 TION.—For purposes of this section, the term ‘‘federally 

5 insured depository institution’’ means any insured deposi6 tory institution (as defined in section 3 of the Federal De7 posit Insurance Act (12 U.S.C. 1813)) and any insured 

8 credit union (as defined in section 101 of the Federal 

9 Credit Union Act (12 U.S.C. 1752)). 

10 (c) OPERATION OF PROGRAM.—In providing for the 

11 operation of the program described in subsection (a), the 

12 Secretary of the Treasury is authorized— 

13 (1) to consult with such private and nonprofit 

14 organizations and Federal, State, and local agencies 

15 as determined appropriate by the Secretary, and 

16 (2) to promulgate such regulations as necessary 

17 to administer such program. 

18 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated such sums as are necessary 

20 to carry out the program described in this section. Any 

21 sums so appropriated shall remain available until ex22 pended. 

Æ 


pwalker on DSK8KYBLC1PROD with BILLS