,i  #aacth ,,congress  #b;d ,session    
,h4 ,r4 #ejgj  ,,in ,,the ,,house ,,of  
,,representatives  ,july #aj1 #bjad ,mr4
 ,gardner 7for himself and ,mr4         
,stewart7 introduced the following bill2
 which was referred to the ,committee on
 ,ways and ,means  ,a ,,bill  ,to amend 
the ,internal ,revenue ,code of #aihf to
 provide for improved compliance with   
the requirements of the earned income   
tax credit4  #a4 ,short title ,this ,act
 may be cited as the ,earnings          
,advancement and ,recovery ,now ,act or 
the ,,earn ,act 4  #b4 ,dedication of   
,,eitc compliance savings to expanding  
the ,,eitc  7a7 ,findings ,the ,congress
 finds the following3  7#a7 ,the ,march 
#bjad report of the ,treasury ,inspector
 ,general for ,tax ,administration on   
the ,internal ,revenue ,service's       
compliance with the ,improper ,payments 
,elimination and ,recovery ,act of #bjaj
 highlights significant improper        
payments related to the earned income   
tax credit under section #cb of the     

,internal ,revenue ,code of #aihf4  7#b7
 ,the ,improper ,payments ,elimination  
and ,recovery ,act of #bjaj defines an  
improper payment as any payment that    
should not have been made or that was   
made in an incorrect amount ''' under   
statutory1 contractual1 administrative1 
or other legally applicable             
requirements4  7#c7 ,the ,internal      
,revenue ,service estimates that #bb    
percent to #bf percent of earned income 
tax credit payments were issued         
improperly in fiscal year #bjac1 with   
the dollar value of these improper      
payments estimated to be between #ac4c  
billion and #ae4f billion4  7#d7 ,the   
,treasury ,inspector ,general for ,tax  
,administration has concluded that the  
,internal ,revenue ,service has made    
little improvement in reducing improper 
earned income tax credit payments since 
being required to report estimates of   
these payments to ,congress1 and as a   
result1 the earned income tax credit    
program remains at high risk for        

improper payments4  7#e7 ,the ,joint    
,committee on ,taxation estimates that  
for tax year #bjad there will be #bh4e  
million filers that will receive the    
earned income tax credit4  7#f7         
,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
 ,revenue ,service4  7b7 ,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 credit4  #c4     
,increase the penalty applicable to paid
 tax preparers who engage in willful or 
reckless conduct  7a7 ,in general       
,section #ffid7;b77#a77;,b7 of the      
,internal ,revenue ,code of #aihf is    
amended by striking #ej percent and     
inserting #ge percent4  7b7 ,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 ,act4  #d4        
,expansion of disallowance period for   
taxpayers who improperly claim ,,eitc   
based on reckless or intentional        
disregard of the rules  7a7 ,in general 
,section #cb7k77#a77;,b77ii7 of the     
,internal ,revenue ,code of #aihf is    
amended by striking #b taxable years and
 inserting #e taxable years4  7b7       
,effective date ,the amendment made by  
this section shall apply to taxable     
years beginning after ,december #ca1    
#bjac4  #e4 ,expansion of math-error    
authority to cover ,,eitc claims during 
period when taxpayer is barred from     
claiming the credit  7a7 ,in general    
,section #fbac7;g77#b77,k7 of the       
,internal ,revenue ,code of #aihf is    
amended by striking section #cb7k77#b7  
and inserting section #cb7k74  7b7      
,effective date ,the amendment made by  
this section shall apply to taxable     

years ending after the date of the      
enactment of this ,act4  #f4 ,penalty   
for erroneous claim of credit made      
applicable to earned income credit  7a7 
,in general ,section #ffgf7;a7 of the   
,internal ,revenue ,code of #aihf is    
amended by striking 7other than a claim 
for a refund or credit relating to the  
earned income credit under section #cb74
  7b7 ,effective date ,the amendment    
made by this section shall apply to     
claims filed after the date of the      
enactment of this ,act4  #g4 ,study on  
earned income credit and improper       
payments  7a7 ,in general ,the          
,comptroller ,general of the ,united    
,states shall conduct a study on--  7#a7
 the effectiveness and impact of the    
earned income tax credit under section  
#cb of the ,internal ,revenue ,code of  
#aihf1 and  7#b7 the incidence and cause
 of improper payments made by the       
,internal ,revenue ,service with respect
 to the credit4  7b7 ,recommendations   
,the study required under subsection 7a7

 shall include recommendations to--     
7#a7 improve the efficiency and         
effectiveness of the earned income tax  
credit1 and  7#b7 reduce the improper   
payments made by the ,internal ,revenue 
,service with respect to the credit4    
7c7 ,report ,not later than #f months   
after the date of the enactment of this 
,act1 the ,comptroller ,general shall   
submit to the ,committee on ,ways and   
,means of the ,house of ,representatives
 and the ,committee on ,finance of the  
,senate a report with the results of the
 study conducted under subsection 7a7   
and recommendations required under      
subsection 7b74