[House Report 114-476]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-476
======================================================================
FUNDABLE CHILD TAX CREDIT ELIGIBILITY VERIFICATION REFORM ACT OF 2016
_______
March 23, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 4722]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 4722) to amend the Internal Revenue Code of 1986 to
require inclusion of the taxpayer's social security number to
claim the refundable portion of the child tax credit, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND..........................................2
II. EXPLANATION OF THE BILL.........................................3
A. Social Security Number Required To Claim The
Refundable Child Tax Credit (sec. 1 of the bill and
sec. 24 of the Code)............................... 3
III. VOTES OF THE COMMITTEE..........................................4
IV. BUDGET EFFECTS OF THE BILL......................................5
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.....10
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED..........11
VII. DISSENTING VIEWS...............................................28
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Refundable Child Tax Credit
Eligibility Verification Reform Act of 2016''.
SEC. 2. SOCIAL SECURITY NUMBER REQUIRED TO CLAIM THE REFUNDABLE PORTION
OF THE CHILD TAX CREDIT.
(a) In General.--Section 24(d) of the Internal Revenue Code of 1986
is amended by adding at the end the following new paragraph:
``(6) Identification requirement.--
``(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) Social security number.--For purposes of this
paragraph, the term `social security number' means a
social security number issued to an individual by the
Social Security Administration (other than a social
security number issued pursuant to subclause (II) (or
that portion of subclause (III) that relates to
subclause (II)) of section 205(c)(2)(B)(i) of the
Social Security Act).''.
(b) Omissions Treated as Mathematical or Clerical Error.--Section
6213(g)(2)(I) of such Code is amended to read as follows:
``(I) an omission of a correct social security number
required under section 24(d)(6) (relating to refundable
portion of child tax credit), or a correct TIN required
under section 24(e) (relating to child tax credit), to
be included on a return,''.
(c) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after December 31, 2015.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
H.R. 4722, as reported by the Committee on Ways and Means,
adds a Social Security number requirement to the refundable
portion of the child tax credit.
B. Background and Need for Legislation
While the Committee continues actively to pursue
comprehensive tax reform as a critical means of promoting
economic growth and job creation, the Committee also believes
that it is important to eliminate waste, fraud, and abuse in
the tax code. By adding an SSN requirement to the refundable
portion of the child tax credit, H.R. 4722 ensures that
improper payments of the refundable child tax credit to those
not authorized to work in the United States will be minimized.
C. Legislative History
Background
H.R. 4722 was introduced on March 10, 2016, and was
referred to the Committee on Ways and Means.
Committee action
The Committee on Ways and Means marked up H.R. 4722, the
``Refundable Child Tax Credit Eligibility Verification Reform
Act of 2016,'' on March 16, 2016, and ordered the bill, as
amended, favorably reported (with a quorum being present).
Committee hearings
Improper child tax credit payments to those without SSNs
were discussed at an Oversight Subcommittee Hearing on Improper
Payments in the Administration of Refundable Tax Credits on May
25, 2011.
II. EXPLANATION OF THE BILL
A. Social Security Number Required To Claim the Refundable Child Tax
Credit (sec. 1 of the bill and sec. 24 of the Code)
PRESENT LAW
An individual may claim a tax credit for each qualifying
child under the age of 17.\1\ The maximum amount of the credit
per child is $1,000. A child who is not a citizen, national, or
resident of the United States cannot be a qualifying child. The
child tax credit is allowable against both the regular tax and
the alternative minimum tax.
---------------------------------------------------------------------------
\1\Sec. 24. Unless otherwise specified, all section references are
made to the Internal Revenue Code of 1986, as amended.
---------------------------------------------------------------------------
To the extent that the child tax credit cannot offset the
taxpayer's tax liability (because the taxpayer's tax liability
has otherwise been reduced to zero), the taxpayer may be
eligible for an additional credit which is refundable. The
additional credit (also known as the refundable child tax
credit) is an amount equal to the greater of (1) 15 percent of
the taxpayer's earned income in excess of $3,000, or (2) in the
case of a family with three or more children, the amount by
which the taxpayer's social security taxes exceed the earned
income tax credit.
Any individual filing a U.S. tax return is required to
state his or her taxpayer identification number on such return.
Generally, a taxpayer identification number is the individual's
Social Security number (``SSN'').\2\ However, in the case of
individuals who are not eligible to be issued an SSN, but who
still have a tax filing obligation, the IRS issues IRS
individual taxpayer identification numbers (``ITIN'') for use
in connection with the individual's tax filing requirements.\3\
An individual who is eligible to receive an SSN may not obtain
an ITIN for purposes of his or her tax filing obligations.\4\
An ITIN does not provide eligibility to work in the United
States or claim Social Security benefits.
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\2\Sec. 6109(a).
\3\Treas. Reg. Sec. 301.6109-1(d)(3)(i).
\4\Treas. Reg. Sec. 301.6109-1(d)(3)(ii).
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No child tax credit is allowed to any taxpayer with respect
to any qualifying child unless the taxpayer includes the name
and the taxpayer identification number of the qualifying child
on the return of tax for the taxable year. For these purposes,
a taxpayer identification number may be either an SSN, an ITIN,
or an IRS adoption taxpayer identification number (``ATIN'').
REASONS FOR CHANGE
Given that the refundable portion of the child tax credit
requires earned income as a condition of eligibility, the
Committee believes that additional steps should be taken to
ensure that those who cannot legally earn income in the United
States cannot collect the refundable portion of this credit.
The Committee observes that, in 1996, Congress enacted
legislation making those without SSNs ineligible to receive the
earned income tax credit, a similar refundable tax credit. The
Committee believes that in order to prevent abuse in the
refundable portion of the child tax credit--such as that
identified in the Tax Inspector General for Tax
Administration's report\5\--the SSN requirement should be
extended to the refundable portion of the child tax credit as
well.
---------------------------------------------------------------------------
\5\Treasury Inspector General For Tax Administration, Individuals
Who Are Not Authorized To Work In The United States Were Paid $4.2
Billion In Refundable Credits, July 7, 2011.
---------------------------------------------------------------------------
EXPLANATION OF PROVISION
The provision adds a requirement for a taxpayer to report
an SSN (in the case of a joint return, the SSN of at least one
spouse) on the tax return in order to claim the additional
child tax credit. Thus, under the provision, a taxpayer whose
taxpayer identification number is an ITIN (in the case of
married taxpayers, where both taxpayers' identification numbers
are ITINs) cannot claim the refundable child tax credit.
EFFECTIVE DATE
The provision is effective for taxable years beginning
after December 31, 2015.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 4722, the ``Refundable Child Tax Credit
Eligibility Verification Reform Act of 2016'' on March 16,
2016.
MOTION TO REPORT THE BILL
The bill, H.R. 4722, was ordered favorably reported to the
House of Representatives as amended by a roll call vote of 21
yeas to 15 nays (with a quorum being present). The vote was as
follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady...................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Johnson.................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Nunes...................... ........ ........ ......... Mr. McDermott.... ........ X .........
Mr. Tiberi..................... X ........ ......... Mr. Lewis........ ........ X .........
Mr. Reichert................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Boustany................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Roskam..................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. Price...................... ........ ........ ......... Mr. Thompson..... ........ X .........
Mr. Buchanan................... ........ ........ ......... Mr. Larson....... ........ X .........
Mr. Smith (NE)................. X ........ ......... Mr. Blumenauer... ........ X .........
Ms. Jenkins.................... X ........ ......... Mr. Kind......... ........ X .........
Mr. Paulsen.................... X ........ ......... Mr. Pascrell..... ........ X .........
Mr. Marchant................... X ........ ......... Mr. Crowley...... ........ X .........
Ms. Black...................... X ........ ......... Mr. Davis........ ........ X .........
Mr. Reed....................... X ........ ......... Ms. Sanchez...... ........ X .........
Mr. Young...................... X ........ .........
Mr. Kelly...................... X ........ .........
Mr. Renacci.................... X ........ .........
Mr. Meehan..................... X ........ .........
Ms. Noem....................... X ........ .........
Mr. Holding.................... X ........ .........
Mr. Smith (MO)................. X ........ .........
Mr. Dold....................... X ........ .........
Mr. Rice....................... X ........ .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 4722, as
reported.
The bill, as reported, is estimated to have the following
effect on Federal fiscal year budget receipts for the period
2016-2026:
FISCAL YEARS
[Billions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Item 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-20 2016-26
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Require SSN of either taxpayer for -- 2.5 2.3 2.1 2.0 2.0 1.9 1.8 1.8 1.7 1.7 10.9 19.9
refundable child credit\1\................
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOTE: Details may not add to totals due to rounding.
\1\Estimate contains the following outlay effects:
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-20 2016-26
Require SSN of either taxpayer for -- -2.5 -2.3 -2.1 -2.0 -2.0 -1.9 -1.8 -1.8 -1.7 -1.7 -10.9 -19.9
refundable child credit...................
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: the gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that there are no new or increased tax
expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 22, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4722, the
Refundable Child Tax Credit Eligibility Verification Reform Act
of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Peter
Huether.
Sincerely,
Keith Hall.
Enclosure.
H.R. 4722--Refundable Child Tax Credit Eligibility Verification Reform
Act of 2016
H.R. 4722 would amend the Internal Revenue Code to require
taxpayers to provide their Social Security Number (SSN) to
claim the refundable portion of the child tax credit. Under
current law, taxpayers who have either an individual taxpayer
identification number or an SSN and include it on their income
tax return can claim a tax credit of $1,000 for each of their
qualifying children under the age of 17. If the credit exceeds
the tax liability of the taxpayer, the excess may be refundable
depending on the taxpayer's earnings, and the refunded portion
is classified as an outlay in the federal budget.
The staff of the Joint Committee on Taxation (JCT)
estimates that the legislation would reduce outlays by $10.9
billion over the 2016-2021 period and by $19.9 billion over the
2016-2026 period. This bill would not affect revenues.
The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting
direct spending and revenues. Enacting H.R. 4722 would result
in a reduction in outlays in each year beginning in 2017. The
estimated decreases in the deficit are shown in the following
table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 4722, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON MARCH 16, 2016.
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By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-2021 2016-2026
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NET DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact................................. 0 -2,512 -2,302 -2,130 -2,027 -1,955 -1,903 -1,849 -1,790 -1,741 -1,706 -10,926 -19,916
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Source: Staff of the Joint Committee on Taxation.
Note: Components may not sum to total because of rounding.
JCT estimates that enacting the bill would not increase net
direct spending or on-budget deficits in any of the four 10-
year periods beginning in 2027.
JCT has determined that the bill contains no
intergovernmental mandates but would impose a private-sector
mandate as defined in the Unfunded Mandates Reform Act (UMRA).
Based on information provided by JCT, the cost of the private-
sector mandate would exceed the annual threshold established in
UMRA for private-sector mandates ($157 million in 2016,
adjusted annually for inflation) beginning in 2017.
The CBO staff contact for this estimate is Peter Huether.
The estimate was approved by Mark Booth, Unit Chief, Revenue
Estimating.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's review of the provisions of H.R. 4722 that the
Committee concluded that it is appropriate to report the bill,
as amended, favorably to the House of Representatives with the
recommendation that the bill do pass.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill contains one
private sector mandate: requiring those who claim the
refundable child tax to credit enter a Social Security Number
on their tax return. The Committee has determined that the bill
does not impose a Federal intergovernmental mandate on State,
local, or tribal governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill, and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code and has widespread applicability to
individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code and that have ``widespread applicability'' to individuals
or small businesses, within the meaning of the rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle A--Income Taxes
* * * * * * *
CHAPTER 1--NORMAL TAXES AND SURTAXES
* * * * * * *
Subchapter A--Determination of Tax Liability
* * * * * * *
PART IV--CREDITS AGAINST TAX
* * * * * * *
Subpart A--Nonrefundable Personal Credits
* * * * * * *
SEC. 24. CHILD TAX CREDIT.
(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
with respect to each qualifying child of the taxpayer for which
the taxpayer is allowed a deduction under section 151 an amount
equal to $1,000.
(b) Limitations.--
(1) Limitation based on adjusted gross income.--The
amount of the credit allowable under subsection (a)
shall be reduced (but not below zero) by $50 for each
$1,000 (or fraction thereof) by which the taxpayer's
modified adjusted gross income exceeds the threshold
amount. For purposes of the preceding sentence, the
term ``modified adjusted gross income'' means adjusted
gross income increased by any amount excluded from
gross income under section 911, 931, or 933.
(2) Threshold amount.--For purposes of paragraph (1),
the term ``threshold amount'' means--
(A) $110,000 in the case of a joint return,
(B) $75,000 in the case of an individual who
is not married, and
(C) $55,000 in the case of a married
individual filing a separate return.
For purposes of this paragraph, marital status shall be
determined under section 7703.
(c) Qualifying Child.--For purposes of this section--
(1) In general.--The term ``qualifying child'' means
a qualifying child of the taxpayer (as defined in
section 152(c)) who has not attained age 17.
(2) Exception for certain noncitizens.--The term
``qualifying child'' shall not include any individual
who would not be a dependent if subparagraph (A) of
section 152(b)(3) were applied without regard to all
that follows ``resident of the United States''.
(d) Portion of Credit Refundable.--
(1) In general.--The aggregate credits allowed to a
taxpayer under subpart C shall be increased by the
lesser of--
(A) the credit which would be allowed under
this section without regard to this subsection
and the limitation under section 26(a) or
(B) the amount by which the aggregate amount
of credits allowed by this subpart (determined
without regard to this subsection) would
increase if the limitation imposed by section
26(a) were increased by the greater of--
(i) 15 percent of so much of the
taxpayer's earned income (within the
meaning of section 32) which is taken
into account in computing taxable
income for the taxable year as exceeds
$3,000, or
(ii) in the case of a taxpayer with 3
or more qualifying children, the excess
(if any) of--
(I) the taxpayer's social
security taxes for the taxable
year, over
(II) the credit allowed under
section 32 for the taxable
year.
The amount of the credit allowed under this subsection
shall not be treated as a credit allowed under this
subpart and shall reduce the amount of credit otherwise
allowable under subsection (a) without regard to
section 26(a). For purposes of subparagraph (B), any
amount excluded from gross income by reason of section
112 shall be treated as earned income which is taken
into account in computing taxable income for the
taxable year.
(2) Social security taxes.--For purposes of paragraph
(1)--
(A) In general.--The term ``social security
taxes'' means, with respect to any taxpayer for
any taxable year--
(i) the amount of the taxes imposed
by sections 3101 and 3201(a) on amounts
received by the taxpayer during the
calendar year in which the taxable year
begins,
(ii) 50 percent of the taxes imposed
by section 1401 on the self-employment
income of the taxpayer for the taxable
year, and
(iii) 50 percent of the taxes imposed
by section 3211(a) on amounts received
by the taxpayer during the calendar
year in which the taxable year begins.
(B) Coordination with special refund of
social security taxes.--The term ``social
security taxes'' shall not include any taxes to
the extent the taxpayer is entitled to a
special refund of such taxes under section
6413(c).
(C) Special rule.--Any amounts paid pursuant
to an agreement under section 3121(l) (relating
to agreements entered into by American
employers with respect to foreign affiliates)
which are equivalent to the taxes referred to
in subparagraph (A)(i) shall be treated as
taxes referred to in such subparagraph.
(5) Exception for taxpayers excluding foreign earned
income.--Paragraph (1) shall not apply to any taxpayer
for any taxable year if such taxpayer elects to exclude
any amount from gross income under section 911 for such
taxable year.
(e) Identification Requirements.--
(1) Qualifying child identification requirement.--No
credit shall be allowed under this section to a
taxpayer with respect to any qualifying child unless
the taxpayer includes the name and taxpayer
identification number of such qualifying child on the
return of tax for the taxable year and such taxpayer
identification number was issued on or before the due
date for filing such return.
(2) Taxpayer identification requirement.--No credit
shall be allowed under this section if the identifying
number of the taxpayer was issued after the due date
for filing the return for the taxable year.
(f) Taxable Year Must be Full Taxable Year.--Except in the
case of a taxable year closed by reason of the death of the
taxpayer, no credit shall be allowable under this section in
the case of a taxable year covering a period of less than 12
months.
(g) Restrictions on Taxpayers Who Improperly Claimed Credit
in Prior Year.--
(1) Taxpayers making prior fraudulent or reckless
claims.--
(A) In general.--No credit shall be allowed
under this section for any taxable year in the
disallowance period.
(B) Disallowance period.--For purposes of
subparagraph (A), 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 section 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 section was due to reckless
or intentional disregard of rules and
regulations (but not due to fraud).
(2) Taxpayers making improper prior claims.--In the
case of a taxpayer who is denied credit under this
section for any taxable year as a result of the
deficiency procedures under subchapter B of chapter 63,
no credit shall be allowed under this section for any
subsequent taxable year unless the taxpayer provides
such information as the Secretary may require to
demonstrate eligibility for such credit.
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 63--ASSESSMENT
* * * * * * *
Subchapter B--Deficiency Procedures in the Case of Income, Estate,
Gift, and Certain Excise Taxes
* * * * * * *
SEC. 6213. RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX
COURT.
(a) Time for Filing Petition and Restriction on Assessment.--
Within 90 days, or 150 days if the notice is addressed to a
person outside the United States, after the notice of
deficiency authorized in section 6212 is mailed (not counting
Saturday, Sunday, or a legal holiday in the District of
Columbia as the last day), the taxpayer may file a petition
with the Tax Court for a redetermination of the deficiency.
Except as otherwise provided in section 6851, 6852, or 6861 no
assessment of a deficiency in respect of any tax imposed by
subtitle A, or B, chapter 41, 42, 43, or 44 and no levy or
proceeding in court for its collection shall be made, begun, or
prosecuted until such notice has been mailed to the taxpayer,
nor until the expiration of such 90-day or 150-day period, as
the case may be, nor, if a petition has been filed with the Tax
Court, until the decision of the Tax Court has become final.
Notwithstanding the provisions of section 7421(a), the making
of such assessment or the beginning of such proceeding or levy
during the time such prohibition is in force may be enjoined by
a proceeding in the proper court, including the Tax Court, and
a refund may be ordered by such court of any amount collected
within the period during which the Secretary is prohibited from
collecting by levy or through a proceeding in court under the
provisions of this subsection. The Tax Court shall have no
jurisdiction to enjoin any action or proceeding or order any
refund under this subsection unless a timely petition for a
redetermination of the deficiency has been filed and then only
in respect of the deficiency that is the subject of such
petition. Any petition filed with the Tax Court on or before
the last date specified for filing such petition by the
Secretary in the notice of deficiency shall be treated as
timely filed.
(b) Exceptions to Restrictions on Assessment.--
(1) Assessments arising out of mathematical or
clerical errors.--If the taxpayer is notified that, on
account of a mathematical or clerical error appearing
on the return, an amount of tax in excess of that shown
on the return is due, and that an assessment of the tax
has been or will be made on the basis of what would
have been the correct amount of tax but for the
mathematical or clerical error, such notice shall not
be considered as a notice of deficiency for the
purposes of subsection (a) (prohibiting assessment and
collection until notice of the deficiency has been
mailed), or of section 6212(c)(1) (restricting further
deficiency letters), or of section 6512(a) (prohibiting
credits or refunds after petition to the Tax Court),
and the taxpayer shall have no right to file a petition
with the Tax Court based on such notice, nor shall such
assessment or collection be prohibited by the
provisions of subsection (a) of this section. Each
notice under this paragraph shall set forth the error
alleged and an explanation thereof.
(2) Abatement of assessment of mathematical or
clerical errors.--
(A) Request for abatement.--Notwithstanding
section 6404(b), a taxpayer may file with the
Secretary within 60 days after notice is sent
under paragraph (1) a request for an abatement
of any assessment specified in such notice, and
upon receipt of such request, the Secretary
shall abate the assessment. Any reassessment of
the tax with respect to which an abatement is
made under this subparagraph shall be subject
to the deficiency procedures prescribed by this
subchapter.
(B) Stay of collection.--In the case of any
assessment referred to in paragraph (1),
notwithstanding paragraph (1), no levy or
proceeding in court for the collection of such
assessment shall be made, begun, or prosecuted
during the period in which such assessment may
be abated under this paragraph.
(3) Assessments arising out of tentative carryback or
refund adjustments.--If the Secretary determines that
the amount applied, credited, or refunded under section
6411 is in excess of the overassessment attributable to
the carryback or the amount described in section
1341(b)(1) with respect to which such amount was
applied, credited, or refunded, he may assess without
regard to the provisions of paragraph (2) the amount of
the excess as a deficiency as if it were due to a
mathematical or clerical error appearing on the return.
(4) Assessment of amount paid.--Any amount paid as a
tax or in respect of a tax may be assessed upon the
receipt of such payment notwithstanding the provisions
of subsection (a). In any case where such amount is
paid after the mailing of a notice of deficiency under
section 6212, such payment shall not deprive the Tax
Court of jurisdiction over such deficiency determined
under section 6211 without regard to such assessment.
(5) Certain orders of criminal restitution.--If the
taxpayer is notified that an assessment has been or
will be made pursuant to section 6201(a)(4)--
(A) such notice shall not be considered as a
notice of deficiency for the purposes of
subsection (a) (prohibiting assessment and
collection until notice of the deficiency has
been mailed), section 6212(c)(1) (restricting
further deficiency letters), or section 6512(a)
(prohibiting credits or refunds after petition
to the Tax Court), and
(B) subsection (a) shall not apply with
respect to the amount of such assessment.
(c) Failure to File Petition.--If the taxpayer does not file
a petition with the Tax Court within the time prescribed in
subsection (a), the deficiency, notice of which has been mailed
to the taxpayer, shall be assessed, and shall be paid upon
notice and demand from the Secretary.
(d) Waiver of Restrictions.--The taxpayer shall at any time
(whether or not a notice of deficiency has been issued) have
the right, by a signed notice in writing filed with the
Secretary, to waive the restrictions provided in subsection (a)
on the assessment and collection of the whole or any part of
the deficiency.
(e) Suspension of Filing Period for Certain Excise Taxes.--
The running of the time prescribed by subsection (a) for filing
a petition in the Tax Court with respect to the taxes imposed
by section 4941 (relating to taxes on self-dealing), 4942
(relating to taxes on failure to distribute income), 4943
(relating to taxes on excess business holdings), 4944 (relating
to investments which jeopardize charitable purpose), 4945
(relating to taxes on taxable expenditures), 4951 (relating to
taxes on self-dealing), or 4952 (relating to taxes on taxable
expenditures), 4955 (relating to taxes on political
expenditures), 4958 (relating to private excess benefit), 4971
(relating to excise taxes on failure to meet minimum funding
standard), 4975 (relating to excise taxes on prohibited
transactions) shall be suspended for any period during which
the Secretary has extended the time allowed for making
correction under section 4963(e).
(f) Coordination With Title 11.--
(1) Suspension of running of period for filing
petition in title 11 cases.--In any case under title 11
of the United States Code, the running of the time
prescribed by subsection (a) for filing a petition in
the Tax Court with respect to any deficiency shall be
suspended for the period during which the debtor is
prohibited by reason of such case from filing a
petition in the Tax Court with respect to such
deficiency, and for 60 days thereafter.
(2) Certain action not taken into account.--For
purposes of the second and third sentences of
subsection (a), the filing of a proof of claim or
request for payment (or the taking of any other action)
in a case under title 11 of the United States Code
shall not be treated as action prohibited by such
second sentence.
(g) Definitions.--For purposes of this section--
(1) Return.--The term ``return'' includes any return,
statement, schedule, or list, and any amendment or
supplement thereto, filed with respect to any tax
imposed by subtitle A or B, or chapter 41, 42, 43, or
44.
(2) Mathematical or clerical error.--The term
``mathematical or clerical error'' means--
(A) an error in addition, subtraction,
multiplication, or division shown on any
return,
(B) an incorrect use of any table provided by
the Internal Revenue Service with respect to
any return if such incorrect use is apparent
from the existence of other information on the
return,
(C) an entry on a return of an item which is
inconsistent with another entry of the same or
another item on such return,
(D) an omission of information which is
required to be supplied on the return to
substantiate an entry on the return,
(E) an entry on a return of a deduction or
credit in an amount which exceeds a statutory
limit imposed by subtitle A or B, or chapter
41, 42, 43, or 44, if such limit is expressed--
(i) as a specified monetary amount,
or
(ii) as a percentage, ratio, or
fraction, and if the items entering
into the application of such limit
appear on such return,
(F) an omission of a correct taxpayer
identification number required under section 32
(relating to the earned income credit) to be
included on a return,
(G) an entry on a return claiming the credit
under section 32 with respect to net earnings
from self- employment described in section
32(c)(2)(A) to the extent the tax imposed by
section 1401 (relating to self-employment tax)
on such net earnings has not been paid,
(H) an omission of a correct TIN required
under section 21 (relating to expenses for
household and dependent care services necessary
for gainful employment) or section 151
(relating to allowance of deductions for
personal exemptions),
(I) an omission of a correct TIN required
under section 24(e) (relating to child tax
credit) to be included on a return,
(J) an omission of a correct TIN required
under section 5A(g)(1) (relating to higher
education tuition and related expenses) to be
included on a return,
(K) an omission of information required by
section 32(k)(2) (relating to taxpayers making
improper prior claims of earned income credit)
or an entry on the return claiming the credit
under section 32 for a taxable year for which
the credit is disallowed under subsection
(k)(1) thereof,
(L) the inclusion on a return of a TIN
required to be included on the return under
section 21, 24, or 32 if--
(i) such TIN is of an individual
whose age affects the amount of the
credit under such section, and
(ii) the computation of the credit on
the return reflects the treatment of
such individual as being of an age
different from the individual's age
based on such TIN,
(M) the entry on the return claiming the
credit under section 32 with respect to a child
if, according to the Federal Case Registry of
Child Support Orders established under section
453(h) of the Social Security Act, the taxpayer
is a noncustodial parent of such child,
(N) an omission of any increase required
under section 36(f) with respect to the
recapture of a credit allowed under section 36;
(O) the inclusion on a return of an
individual taxpayer identification number
issued under section 6109(i) which has expired,
been revoked by the Secretary, or is otherwise
invalid
(P) an omission of information required by
section 24(h)(2) or an entry on the return
claiming the credit under section 24 for a
taxable year for which the credit is disallowed
under subsection (h)(1) thereof, and
(Q) an omission of information required by
section 25A(i)(8)(B) or an entry on the return
claiming the credit determined under section
25A(i) for a taxable year for which the credit
is disallowed under paragraph (8)(A) thereof.
A taxpayer shall be treated as having omitted a correct
TIN for purposes of the preceding sentence if
information provided by the taxpayer on the return with
respect to the individual whose TIN was provided
differs from the information the Secretary obtains from
the person issuing the TIN.
(h) Cross References.--
(1) For assessment as if a mathematical error on the
return, in the case of erroneous claims for income tax
prepayment credits, see section 6201(a)(3).
(2) For assessments without regard to restrictions
imposed by this section in the case of--
(A) Recovery of foreign income taxes, see
section 905(c).
(B) Recovery of foreign estate tax, see
section 2016.
(3) For provisions relating to application of this
subchapter in the case of certain partnership items,
etc., see section 6230(a).
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
made by the bill, as reported, are shown as follows (existing
law proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle A--Income Taxes
* * * * * * *
CHAPTER 1--NORMAL TAXES AND SURTAXES
* * * * * * *
Subchapter A--Determination of Tax Liability
* * * * * * *
PART IV--CREDITS AGAINST TAX
* * * * * * *
Subpart A--Nonrefundable Personal Credits
* * * * * * *
SEC. 24. CHILD TAX CREDIT.
(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
with respect to each qualifying child of the taxpayer for which
the taxpayer is allowed a deduction under section 151 an amount
equal to $1,000.
(b) Limitations.--
(1) Limitation based on adjusted gross income.--The
amount of the credit allowable under subsection (a)
shall be reduced (but not below zero) by $50 for each
$1,000 (or fraction thereof) by which the taxpayer's
modified adjusted gross income exceeds the threshold
amount. For purposes of the preceding sentence, the
term ``modified adjusted gross income'' means adjusted
gross income increased by any amount excluded from
gross income under section 911, 931, or 933.
(2) Threshold amount.--For purposes of paragraph (1),
the term ``threshold amount'' means--
(A) $110,000 in the case of a joint return,
(B) $75,000 in the case of an individual who
is not married, and
(C) $55,000 in the case of a married
individual filing a separate return.
For purposes of this paragraph, marital status shall be
determined under section 7703.
(c) Qualifying Child.--For purposes of this section--
(1) In general.--The term ``qualifying child'' means
a qualifying child of the taxpayer (as defined in
section 152(c)) who has not attained age 17.
(2) Exception for certain noncitizens.--The term
``qualifying child'' shall not include any individual
who would not be a dependent if subparagraph (A) of
section 152(b)(3) were applied without regard to all
that follows ``resident of the United States''.
(d) Portion of Credit Refundable.--
(1) In general.--The aggregate credits allowed to a
taxpayer under subpart C shall be increased by the
lesser of--
(A) the credit which would be allowed under
this section without regard to this subsection
and the limitation under section 26(a) or
(B) the amount by which the aggregate amount
of credits allowed by this subpart (determined
without regard to this subsection) would
increase if the limitation imposed by section
26(a) were increased by the greater of--
(i) 15 percent of so much of the
taxpayer's earned income (within the
meaning of section 32) which is taken
into account in computing taxable
income for the taxable year as exceeds
$3,000, or
(ii) in the case of a taxpayer with 3
or more qualifying children, the excess
(if any) of--
(I) the taxpayer's social
security taxes for the taxable
year, over
(II) the credit allowed under
section 32 for the taxable
year.
The amount of the credit allowed under this subsection
shall not be treated as a credit allowed under this
subpart and shall reduce the amount of credit otherwise
allowable under subsection (a) without regard to
section 26(a). For purposes of subparagraph (B), any
amount excluded from gross income by reason of section
112 shall be treated as earned income which is taken
into account in computing taxable income for the
taxable year.
(2) Social security taxes.--For purposes of paragraph
(1)--
(A) In general.--The term ``social security
taxes'' means, with respect to any taxpayer for
any taxable year--
(i) the amount of the taxes imposed
by sections 3101 and 3201(a) on amounts
received by the taxpayer during the
calendar year in which the taxable year
begins,
(ii) 50 percent of the taxes imposed
by section 1401 on the self-employment
income of the taxpayer for the taxable
year, and
(iii) 50 percent of the taxes imposed
by section 3211(a) on amounts received
by the taxpayer during the calendar
year in which the taxable year begins.
(B) Coordination with special refund of
social security taxes.--The term ``social
security taxes'' shall not include any taxes to
the extent the taxpayer is entitled to a
special refund of such taxes under section
6413(c).
(C) Special rule.--Any amounts paid pursuant
to an agreement under section 3121(l) (relating
to agreements entered into by American
employers with respect to foreign affiliates)
which are equivalent to the taxes referred to
in subparagraph (A)(i) shall be treated as
taxes referred to in such subparagraph.
(5) Exception for taxpayers excluding foreign earned
income.--Paragraph (1) shall not apply to any taxpayer
for any taxable year if such taxpayer elects to exclude
any amount from gross income under section 911 for such
taxable year.
(6) Identification requirement.--
(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) Social security number.--For purposes of
this paragraph, the term ``social security
number'' means a social security number issued
to an individual by the Social Security
Administration (other than a social security
number issued pursuant to subclause (II) (or
that portion of subclause (III) that relates to
subclause (II)) of section 205(c)(2)(B)(i) of
the Social Security Act).
(e) Identification Requirements.--
(1) Qualifying child identification requirement.--No
credit shall be allowed under this section to a
taxpayer with respect to any qualifying child unless
the taxpayer includes the name and taxpayer
identification number of such qualifying child on the
return of tax for the taxable year and such taxpayer
identification number was issued on or before the due
date for filing such return.
(2) Taxpayer identification requirement.--No credit
shall be allowed under this section if the identifying
number of the taxpayer was issued after the due date
for filing the return for the taxable year.
(f) Taxable Year Must be Full Taxable Year.--Except in the
case of a taxable year closed by reason of the death of the
taxpayer, no credit shall be allowable under this section in
the case of a taxable year covering a period of less than 12
months.
(g) Restrictions on Taxpayers Who Improperly Claimed Credit
in Prior Year.--
(1) Taxpayers making prior fraudulent or reckless
claims.--
(A) In general.--No credit shall be allowed
under this section for any taxable year in the
disallowance period.
(B) Disallowance period.--For purposes of
subparagraph (A), 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 section 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 section was due to reckless
or intentional disregard of rules and
regulations (but not due to fraud).
(2) Taxpayers making improper prior claims.--In the
case of a taxpayer who is denied credit under this
section for any taxable year as a result of the
deficiency procedures under subchapter B of chapter 63,
no credit shall be allowed under this section for any
subsequent taxable year unless the taxpayer provides
such information as the Secretary may require to
demonstrate eligibility for such credit.
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 63--ASSESSMENT
* * * * * * *
Subchapter B--Deficiency Procedures in the Case of Income, Estate,
Gift, and Certain Excise Taxes
* * * * * * *
SEC. 6213. RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX
COURT.
(a) Time for Filing Petition and Restriction on Assessment.--
Within 90 days, or 150 days if the notice is addressed to a
person outside the United States, after the notice of
deficiency authorized in section 6212 is mailed (not counting
Saturday, Sunday, or a legal holiday in the District of
Columbia as the last day), the taxpayer may file a petition
with the Tax Court for a redetermination of the deficiency.
Except as otherwise provided in section 6851, 6852, or 6861 no
assessment of a deficiency in respect of any tax imposed by
subtitle A, or B, chapter 41, 42, 43, or 44 and no levy or
proceeding in court for its collection shall be made, begun, or
prosecuted until such notice has been mailed to the taxpayer,
nor until the expiration of such 90-day or 150-day period, as
the case may be, nor, if a petition has been filed with the Tax
Court, until the decision of the Tax Court has become final.
Notwithstanding the provisions of section 7421(a), the making
of such assessment or the beginning of such proceeding or levy
during the time such prohibition is in force may be enjoined by
a proceeding in the proper court, including the Tax Court, and
a refund may be ordered by such court of any amount collected
within the period during which the Secretary is prohibited from
collecting by levy or through a proceeding in court under the
provisions of this subsection. The Tax Court shall have no
jurisdiction to enjoin any action or proceeding or order any
refund under this subsection unless a timely petition for a
redetermination of the deficiency has been filed and then only
in respect of the deficiency that is the subject of such
petition. Any petition filed with the Tax Court on or before
the last date specified for filing such petition by the
Secretary in the notice of deficiency shall be treated as
timely filed.
(b) Exceptions to Restrictions on Assessment.--
(1) Assessments arising out of mathematical or
clerical errors.--If the taxpayer is notified that, on
account of a mathematical or clerical error appearing
on the return, an amount of tax in excess of that shown
on the return is due, and that an assessment of the tax
has been or will be made on the basis of what would
have been the correct amount of tax but for the
mathematical or clerical error, such notice shall not
be considered as a notice of deficiency for the
purposes of subsection (a) (prohibiting assessment and
collection until notice of the deficiency has been
mailed), or of section 6212(c)(1) (restricting further
deficiency letters), or of section 6512(a) (prohibiting
credits or refunds after petition to the Tax Court),
and the taxpayer shall have no right to file a petition
with the Tax Court based on such notice, nor shall such
assessment or collection be prohibited by the
provisions of subsection (a) of this section. Each
notice under this paragraph shall set forth the error
alleged and an explanation thereof.
(2) Abatement of assessment of mathematical or
clerical errors.--
(A) Request for abatement.--Notwithstanding
section 6404(b), a taxpayer may file with the
Secretary within 60 days after notice is sent
under paragraph (1) a request for an abatement
of any assessment specified in such notice, and
upon receipt of such request, the Secretary
shall abate the assessment. Any reassessment of
the tax with respect to which an abatement is
made under this subparagraph shall be subject
to the deficiency procedures prescribed by this
subchapter.
(B) Stay of collection.--In the case of any
assessment referred to in paragraph (1),
notwithstanding paragraph (1), no levy or
proceeding in court for the collection of such
assessment shall be made, begun, or prosecuted
during the period in which such assessment may
be abated under this paragraph.
(3) Assessments arising out of tentative carryback or
refund adjustments.--If the Secretary determines that
the amount applied, credited, or refunded under section
6411 is in excess of the overassessment attributable to
the carryback or the amount described in section
1341(b)(1) with respect to which such amount was
applied, credited, or refunded, he may assess without
regard to the provisions of paragraph (2) the amount of
the excess as a deficiency as if it were due to a
mathematical or clerical error appearing on the return.
(4) Assessment of amount paid.--Any amount paid as a
tax or in respect of a tax may be assessed upon the
receipt of such payment notwithstanding the provisions
of subsection (a). In any case where such amount is
paid after the mailing of a notice of deficiency under
section 6212, such payment shall not deprive the Tax
Court of jurisdiction over such deficiency determined
under section 6211 without regard to such assessment.
(5) Certain orders of criminal restitution.--If the
taxpayer is notified that an assessment has been or
will be made pursuant to section 6201(a)(4)--
(A) such notice shall not be considered as a
notice of deficiency for the purposes of
subsection (a) (prohibiting assessment and
collection until notice of the deficiency has
been mailed), section 6212(c)(1) (restricting
further deficiency letters), or section 6512(a)
(prohibiting credits or refunds after petition
to the Tax Court), and
(B) subsection (a) shall not apply with
respect to the amount of such assessment.
(c) Failure to File Petition.--If the taxpayer does not file
a petition with the Tax Court within the time prescribed in
subsection (a), the deficiency, notice of which has been mailed
to the taxpayer, shall be assessed, and shall be paid upon
notice and demand from the Secretary.
(d) Waiver of Restrictions.--The taxpayer shall at any time
(whether or not a notice of deficiency has been issued) have
the right, by a signed notice in writing filed with the
Secretary, to waive the restrictions provided in subsection (a)
on the assessment and collection of the whole or any part of
the deficiency.
(e) Suspension of Filing Period for Certain Excise Taxes.--
The running of the time prescribed by subsection (a) for filing
a petition in the Tax Court with respect to the taxes imposed
by section 4941 (relating to taxes on self-dealing), 4942
(relating to taxes on failure to distribute income), 4943
(relating to taxes on excess business holdings), 4944 (relating
to investments which jeopardize charitable purpose), 4945
(relating to taxes on taxable expenditures), 4951 (relating to
taxes on self-dealing), or 4952 (relating to taxes on taxable
expenditures), 4955 (relating to taxes on political
expenditures), 4958 (relating to private excess benefit), 4971
(relating to excise taxes on failure to meet minimum funding
standard), 4975 (relating to excise taxes on prohibited
transactions) shall be suspended for any period during which
the Secretary has extended the time allowed for making
correction under section 4963(e).
(f) Coordination With Title 11.--
(1) Suspension of running of period for filing
petition in title 11 cases.--In any case under title 11
of the United States Code, the running of the time
prescribed by subsection (a) for filing a petition in
the Tax Court with respect to any deficiency shall be
suspended for the period during which the debtor is
prohibited by reason of such case from filing a
petition in the Tax Court with respect to such
deficiency, and for 60 days thereafter.
(2) Certain action not taken into account.--For
purposes of the second and third sentences of
subsection (a), the filing of a proof of claim or
request for payment (or the taking of any other action)
in a case under title 11 of the United States Code
shall not be treated as action prohibited by such
second sentence.
(g) Definitions.--For purposes of this section--
(1) Return.--The term ``return'' includes any return,
statement, schedule, or list, and any amendment or
supplement thereto, filed with respect to any tax
imposed by subtitle A or B, or chapter 41, 42, 43, or
44.
(2) Mathematical or clerical error.--The term
``mathematical or clerical error'' means--
(A) an error in addition, subtraction,
multiplication, or division shown on any
return,
(B) an incorrect use of any table provided by
the Internal Revenue Service with respect to
any return if such incorrect use is apparent
from the existence of other information on the
return,
(C) an entry on a return of an item which is
inconsistent with another entry of the same or
another item on such return,
(D) an omission of information which is
required to be supplied on the return to
substantiate an entry on the return,
(E) an entry on a return of a deduction or
credit in an amount which exceeds a statutory
limit imposed by subtitle A or B, or chapter
41, 42, 43, or 44, if such limit is expressed--
(i) as a specified monetary amount,
or
(ii) as a percentage, ratio, or
fraction, and if the items entering
into the application of such limit
appear on such return,
(F) an omission of a correct taxpayer
identification number required under section 32
(relating to the earned income credit) to be
included on a return,
(G) an entry on a return claiming the credit
under section 32 with respect to net earnings
from self- employment described in section
32(c)(2)(A) to the extent the tax imposed by
section 1401 (relating to self-employment tax)
on such net earnings has not been paid,
(H) an omission of a correct TIN required
under section 21 (relating to expenses for
household and dependent care services necessary
for gainful employment) or section 151
(relating to allowance of deductions for
personal exemptions),
[(I) an omission of a correct TIN required
under section 24(e) (relating to child tax
credit) to be included on a return,]
(I) an omission of a correct social security
number required under section 24(d)(6)
(relating to refundable portion of child tax
credit), or a correct TIN required under
section 24(e) (relating to child tax credit),
to be included on a return,
(J) an omission of a correct TIN required
under section 5A(g)(1) (relating to higher
education tuition and related expenses) to be
included on a return,
(K) an omission of information required by
section 32(k)(2) (relating to taxpayers making
improper prior claims of earned income credit)
or an entry on the return claiming the credit
under section 32 for a taxable year for which
the credit is disallowed under subsection
(k)(1) thereof,
(L) the inclusion on a return of a TIN
required to be included on the return under
section 21, 24, or 32 if--
(i) such TIN is of an individual
whose age affects the amount of the
credit under such section, and
(ii) the computation of the credit on
the return reflects the treatment of
such individual as being of an age
different from the individual's age
based on such TIN,
(M) the entry on the return claiming the
credit under section 32 with respect to a child
if, according to the Federal Case Registry of
Child Support Orders established under section
453(h) of the Social Security Act, the taxpayer
is a noncustodial parent of such child,
(N) an omission of any increase required
under section 36(f) with respect to the
recapture of a credit allowed under section 36;
(O) the inclusion on a return of an
individual taxpayer identification number
issued under section 6109(i) which has expired,
been revoked by the Secretary, or is otherwise
invalid
(P) an omission of information required by
section 24(h)(2) or an entry on the return
claiming the credit under section 24 for a
taxable year for which the credit is disallowed
under subsection (h)(1) thereof, and
(Q) an omission of information required by
section 25A(i)(8)(B) or an entry on the return
claiming the credit determined under section
25A(i) for a taxable year for which the credit
is disallowed under paragraph (8)(A) thereof.
A taxpayer shall be treated as having omitted a correct
TIN for purposes of the preceding sentence if
information provided by the taxpayer on the return with
respect to the individual whose TIN was provided
differs from the information the Secretary obtains from
the person issuing the TIN.
(h) Cross References.--
(1) For assessment as if a mathematical error on the
return, in the case of erroneous claims for income tax
prepayment credits, see section 6201(a)(3).
(2) For assessments without regard to restrictions
imposed by this section in the case of--
(A) Recovery of foreign income taxes, see
section 905(c).
(B) Recovery of foreign estate tax, see
section 2016.
(3) For provisions relating to application of this
subchapter in the case of certain partnership items,
etc., see section 6230(a).
* * * * * * *
VII. DISSENTING VIEWS
With the economy still recovering and hardworking Americans
feeling left behind, we should be focusing in our Committee on
proposals to grow the economy, create good-paying jobs, and
strengthen the programs that reduce poverty and protect
children and seniors, not tearing those very programs apart.
This bill was part of a misguided effort to win support from
extreme, right-wing Republicans for their party's budget
resolution. Committee Democrats strongly oppose both this
specific bill and the general tactic of appeasing hardliners by
offering legislation that harms seniors, children, and
Americans trying to work their way out of poverty and obtain
health coverage for their families.
The Committee Democrats unanimously opposed H.R. 4722 at
the Committee mark up. This legislation would effectively
eliminate the refundable portion of the Child Tax Credit for
1.5 million low-income working families and 3 million children.
The Child Tax Credit was first enacted in 1997, on a bipartisan
basis, as a means of fighting poverty and easing the financial
burden that families--particularly low income families--incur
when they have children. Unfortunately, the Majority's position
on helping low-income families with children has since changed,
as the $19.6 billion in revenue estimated to be raised by this
bill will come directly from these families--the very
population the Child Tax Credit was designed to serve.
We support proposals to reduce fraud, waste, and abuse. But
this legislation serves only to limit a critical benefit to
working low-income families with children. In 2013, more than
35 million families claimed the Child Tax Credit, and more than
20 million families claimed the Additional Child Tax Credit.
The average adjusted gross income of families claiming this
credit was about $22,400, nearly $1,000 below the federal
poverty level. The average amount claimed was $1,300. If H.R.
4722 is passed it would effectively push these working families
and their children even further into poverty. Furthermore, the
Joint Committee on Taxation estimates that this legislation
will burden the neediest families. More than 70 percent of the
impact will be felt by families making less than $33,900.
We are concerned that this legislation would harm children
who are United States citizens. More specifically, it would
harm American children who are United States citizens living in
immigrant families. In 2013, more than nine in ten children (95
percent) claimed under the Child Tax Credit were United States
citizens with 93 percent claiming the Additional Child Tax
Credit.
Even with the Child Tax Credit and other successful anti-
poverty tools, an unacceptable number of children in the United
States live in poverty. After falling sharply in the 1990s, the
child poverty rate has steadily increased over the last decade,
although less than it would have without anti-poverty measures
like the Child Tax Credit. Immigrant families and their
children have been among those most affected by the rise.
Today, more than one-quarter of children of immigrants live in
poor families, and more than half live in low-income families.
Furthermore, under H.R. 4722 Latino children would be the
hardest hit. Forty percent of children living in poverty are
Latino and 4.5 million of those live in mixed status families.
Unlike the Earned Income Tax Credit that is designed to promote
work, the Child Tax Credit is designed to fight child poverty
and ensure the well-being of children. In 2013, the Child Tax
Credit lifted 5 million children out of poverty. This
legislation would reduce the effectiveness of the Child Tax
Credit as an anti-poverty measure for more than three million
children.
There is no doubt that we need more revenue to maintain a
functioning, effective government. But it seems that we should
start by asking from those who have the most, not those who
have the least. While Republicans say that they are interested
in addressing poverty, they continue to bring forth bills such
as H.R. 4722 that would cut or end programs like the Child Tax
Credit that have kept millions of children out of poverty.
Sander M. Levin,
Ranking Member.
[all]