Improper Tax Payments Reduction Act of 2017

Bill: 115-hr-4233
Sponsor: full_name: Rep. Renacci, James B. [R-OH-16]
Introduced: 2017-11-02
Policy area: Taxation
Subjects: Fraud offenses and financial crimes

Income tax credits

Income tax deductions

Poverty and welfare assistance

Tax administration and collection, taxpayers

Wages and earnings
Latest action: action_date: 2017-11-02
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2017-11-02
action_desc: Introduced in House
text: <p><b>Improper Tax Payments Reduction Act of 2017 </b></p> <p>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. </p>

tv_txt: I 115th CONGRESS 1st Session H. R. 4233 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.

1. Short title This Act may be cited as the Improper Tax Payments Reduction Act of 2017 . 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. 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.