Title: Improper Tax Payments Reduction Act of 2017
Policy area: Taxation

Summary:
Improper Tax Payments Reduction Act of 2017
This bill amends the Internal Revenue Code, with respect to the earned income tax credit, to: (1) specify that a taxpayer must claim all allowable deductions when determining net earnings from self-employment, (2) require employers who report wages to include the name and address of each employee and the amount of reportable wages received by each of those employees, and (3) limit earned income to amounts substantiated by the taxpayer on statements furnished or returns filed under third-party information reporting requirements or amounts substantiated by the taxpayer's books and records.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4233 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 4233

 To amend the Internal Revenue Code of 1986 to prevent the fraudulent 
 overreporting of income with respect to the earned income tax credit 
                  and the additional child tax credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 2, 2017

Mr. Renacci (for himself and Mr. Rice of South Carolina) 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 prevent the fraudulent 
 overreporting of income with respect to the earned income tax credit 
                  and the additional child tax credit.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improper Tax Payments Reduction Act 
of 2017''.

SEC. 2. PROCEDURES TO REDUCE IMPROPER CLAIMS OF EARNED INCOME CREDIT.

    (a) Clarification Regarding Determination of Self-Employment Income 
Which Is Treated as Earned Income.--Section 32(c)(2)(B) of such Code is 
amended by striking ``and'' at the end of clause (v), by striking the 
period at the end of clause (vi) and inserting ``, and'', and by adding 
at the end the following new clause:
                            ``(vii) in determining the taxpayer's net 
                        earnings from self-employment under 
                        subparagraph (A)(ii) there shall not fail to be 
                        taken into account any deduction which is 
                        allowable to the taxpayer under this 
                        subtitle.''.
    (b) Required Quarterly Reporting of Wages of Employees.--Section 
6011 of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new subsection:
    ``(i) Employer Reporting of Wages.--Every person required to deduct 
and withhold from an employee a tax under section 3101 or 3402 shall 
include on each return or statement submitted with respect to such 
taxes, the name and address of such employee and the amount of wages 
for such employee on which such tax was withheld.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 3. CERTAIN INCOME DISALLOWED FOR PURPOSES OF THE EARNED INCOME TAX 
              CREDIT.

    (a) Substantiation Requirement.--Section 32 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(n) Inconsistent Income Reporting.--If the earned income of a 
taxpayer claimed on a return for purposes of this section is not 
substantiated by statements or returns under section 6051, 6052, 
6041(a), or 6050(w) with respect to such taxpayer, the Secretary may 
require such taxpayer to provide books and records to substantiate such 
income, including for the purpose of preventing fraud.''.
    (b) Exclusion of Unsubstantiated Amount From Earned Income.--
Paragraph (2) of section 32(c) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subparagraph:
                    ``(C) Exclusion.--In the case of a taxpayer with 
                respect to which there is an inconsistency described in 
                subsection (n) who fails to substantiate such 
                inconsistency to the satisfaction of the Secretary, the 
                term `earned income' shall not include amounts to the 
                extent of such inconsistency.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.
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