I 
113TH CONGRESS 
2D SESSION 
H. R. 5070 
To amend the Internal Revenue Code of 1986 to provide for improved 
compliance with the requirements of the earned income tax credit. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 10, 2014 
Mr. GARDNER (for himself and Mr. STEWART) 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 provide 
for improved compliance with the requirements of the 
earned income tax credit. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Earnings Advancement 
and Recovery Now Act’’ or the ‘‘EARN Act’’. 
SEC. 2. DEDICATION OF EITC COMPLIANCE SAVINGS TO EX-
PANDING THE EITC. 
(a) FINDINGS.—The Congress finds the following: 
(1) The March 2014 report of the Treasury In-
spector General for Tax Administration on the In-
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ternal Revenue Service’s compliance with the Im-
proper Payments Elimination and Recovery Act of 
2010 highlights significant improper payments re-
lated to the earned income tax credit under section 
32 of the Internal Revenue Code of 1986. 
(2) The Improper Payments Elimination and 
Recovery Act of 2010 defines an improper payment 
as ‘‘any payment that should not have been made or 
that was made in an incorrect amount . . . under 
statutory, contractual, administrative, or other le-
gally applicable requirements’’. 
(3) The Internal Revenue Service estimates 
that 22 percent to 26 percent of earned income tax 
credit payments were issued improperly in fiscal 
year 2013, with the dollar value of these improper 
payments estimated to be between $13.3 billion and 
$15.6 billion. 
(4) The Treasury Inspector General for Tax 
Administration has concluded that the Internal Rev-
enue Service has made little improvement in reduc-
ing improper earned income tax credit payments 
since being required to report estimates of these 
payments to Congress, and as a result, the earned 
income tax credit program remains at high risk for 
improper payments. 
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(5) The Joint Committee on Taxation estimates 
that for tax year 2014 there will be 28.5 million fil-
ers that will receive the earned income tax credit. 
(6) Billions of dollars of improper payments will 
continue to made unless reforms and improvements 
take place with respect to the earned income tax 
credit and its administration by the Internal Rev-
enue Service. 
(b) SENSE OF CONGRESS.—Any budgetary savings 
resulting from the reforms and improvements enacted by 
this Act with respect to the earned income tax credit 
should be dedicated to expanding the credit for working 
families eligible for the earned income tax credit. 
SEC. 3. INCREASE THE PENALTY APPLICABLE TO PAID TAX 
PREPARERS WHO ENGAGE IN WILLFUL OR 
RECKLESS CONDUCT. 
(a) IN GENERAL.—Section 6694(b)(1)(B) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘50 
percent’’ and inserting ‘‘75 percent’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to returns prepared for taxable 
years ending after the date of the enactment of this Act. 
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SEC. 4. EXPANSION OF DISALLOWANCE PERIOD FOR TAX-
PAYERS 
WHO 
IMPROPERLY 
CLAIM 
EITC 
BASED ON RECKLESS OR INTENTIONAL DIS-
REGARD OF THE RULES. 
(a) IN GENERAL.—Section 32(k)(1)(B)(ii) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘2 
taxable years’’ and inserting ‘‘5 taxable years’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
SEC. 5. EXPANSION OF MATH-ERROR AUTHORITY TO 
COVER EITC CLAIMS DURING PERIOD WHEN 
TAXPAYER IS BARRED FROM CLAIMING THE 
CREDIT. 
(a) IN GENERAL.—Section 6213(g)(2)(K) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘sec-
tion 32(k)(2)’’ and inserting ‘‘section 32(k)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
SEC. 6. PENALTY FOR ERRONEOUS CLAIM OF CREDIT 
MADE 
APPLICABLE 
TO 
EARNED 
INCOME 
CREDIT. 
(a) IN GENERAL.—Section 6676(a) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘(other 
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than a claim for a refund or credit relating to the earned 
income credit under section 32)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to claims filed after the date of 
the enactment of this Act. 
SEC. 7. STUDY ON EARNED INCOME CREDIT AND IM-
PROPER PAYMENTS. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall conduct a study on— 
(1) the effectiveness and impact of the earned 
income tax credit under section 32 of the Internal 
Revenue Code of 1986, and 
(2) the incidence and cause of improper pay-
ments made by the Internal Revenue Service with 
respect to the credit. 
(b) RECOMMENDATIONS.—The study required under 
subsection (a) shall include recommendations to— 
(1) improve the efficiency and effectiveness of 
the earned income tax credit, and 
(2) reduce the improper payments made by the 
Internal Revenue Service with respect to the credit. 
(c) REPORT.—Not later than 6 months after the date 
of the enactment of this Act, the Comptroller General shall 
submit to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance 
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of the Senate a report with the results of the study con-
ducted under subsection (a) and recommendations re-
quired under subsection (b). 
Æ 
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