,i #aafth ,,congress #ast ,session ,h4 ,r4 #caeg ,,in ,,the ,,house ,,of ,,representatives ,june #f1 #bjai,mr4 ,kildee 7for himself and ,mr4 ,evans7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,natural ,resources1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to expand the earned income and child tax credits1 and for other purposes4 #a4 ,short title2 amendment of #aihf ,code 7a7 ,short title ,this ,act may be cited as the ,working ,families ,tax ,relief ,act of #bjai4 7b7 ,amendment of #aihf ,code ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 #b4 ,expansion of earned income credit 7a7 ,credit percentage2 phaseout percentage ,the table contained in paragraph 7#a7 of section #cb7;b7 is amended to read as follows3 ,in the case of an eligible individual with3,the credit percentage is3,the phaseout percentage is3 #a qualifying child#db4eae4ih #b qualifying children#ejba4jf #c or more qualifying children#eb4eba4jf ,no qualifying children#bjae4ih4 4 7b7 ,earned income amount2 phaseout amount 7#a7 ,in general ,the table contained in subparagraph 7,a7 of section #cb7;b77#b7 is amended to read as follows3 ,in the case of an eligible individual with3,the earned income amount is3,the phaseout amount is3 #a qualifying child#aj1ahjah1ffj #b or more qualifying children#ad1bijah1ffj ,no qualifying children#aj1ahjaa1chj4 4 7#b7 ,joint filers ,subparagraph 7,b7 of section #cb7;b77#b7 is amended by striking #e1jjj and inserting #e1fij4 7#c7 ,adjustment for inflation ,paragraph 7#a7 of section #cb7;j7 is amended-- 7,a7 by striking after #bjae and inserting after #bjah2 7,b7 by striking subsections 7b77#b77;,a7 and in subparagraph 7,b77i7 and inserting subsection2 7,c7 by striking the #e1jjj amount in subsection 7b77#b77;,b7 in subparagraph 7,b77ii7 and inserting amounts in subsection 7b77#b72 and 7,d7 by striking calendar year #bjjh in subparagraph 7,b77ii7 and inserting calendar year #bjag4 7c7 ,age of eligible individual ,clause 7ii7 of section #cb7;c77#a77;,a7 is amended-- 7#a7 by striking age #be in subclause 7,,ii7 and inserting age #ai2 7#b7 by striking age #fe in subclause 7,,ii7 and inserting age #fh2 7#c7 by striking and at the end of subclause 7,,ii72 7#d7 by striking the period at the end of subclause 7,,iii7 and inserting 1 and2 and 7#e7 by adding at the end the following new subclause3 7,,iv7 in the case of an individual who has not attained age #be before the close of the taxable year1 such individual is not a student 7as defined in section #aeb7;f77#b774 4 7d7 ,advance payment of earned income credit 7#a7 ,in general ,chapter #be of subtitle ,c is amended by inserting after section #cejf the following new section3 #cejg4 ,advance payment of earned income credit 7a7 ,advance payment 7#a7 ,in general ,an employer making payment of wages to an employee with respect to whom an eligibility certificate is in effect shall1 at the time of paying such wages for the payroll period elected by the employee under paragraph 7#b71 make an additional lump sum payment to such employee equal to the earned income advance amount 7except as provided in subsection 7b77#a77;,c77ii77 of such employee4 7#b7 ,payments available after #f months of employment during calendar year ,for purposes of paragraph 7#a71 an employee with respect to whom an eligibility certificate is in effect for the calendar year may elect to receive the earned income advance amount at the same time as wages for any payroll period which begins after the employee has been paid wages by the employer for a period of not less than #f months during such calendar year4 7b7 ,eligibility certificate 7#a7 ,in general ,for purposes of this section1 an eligibility certificate is a statement submitted by an employee to the employer which-- 7,a7 certifies that the employee is eligible to receive the credit provided by section #cb for the taxable year1 7,b7 certifies that the employee does not have an eligibility certificate in effect for the calendar year with respect to the payment of wages by another employer1 and 7,c7 certifies that-- 7i7 an eligibility certificate has not been in effect for the spouse of the employee on any date during the calendar year1 or 7ii7 such a certificate is in effect for the spouse of the employee1 and the employee is eligible to receive only #a_/b the earned income advance amount otherwise determined with respect to the employee4 7#b7 ,employer not responsible for verification ,for purposes of this section1 an employer shall not-- 7,a7 be required to verify any certification made by an employee in the statement described in paragraph 7#a71 or 7,b7 be held liable for any false claims or statements made by an employee in regards to such statement4 7c7 ,earned income advance amount 7#a7 ,determination of amount 7,a7 ,in general ,subject to subparagraph 7,b71 the term earned income advance amount means1 with respect to any payroll period1 the amount of the credit provided under section #cb as determined-- 7i7 on the basis of the wages of the employee from the employer during such calendar year through such payroll period1 and 7ii7 in accordance with tables issued by the ,secretary4 7,b7 ,limitation ,for each calendar year1 except as provided in subparagraph 7,c71 the earned income advance amount shall not exceed #ejj4 7,c7 ,adjustment for inflation 7i7 ,in general ,in the case of any taxable year beginning after #bjai1 the #ejj amount in subparagraph 7,b7 shall be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins determined by substituting calendar year #bjah for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7ii7 ,rounding ,if any increase determined under paragraph 7#a7 is not a multiple of #aj1 such increase shall be rounded to the nearest multiple of #aj4 7#b7 ,armed ,forces ,in the case of an employee who is a member of the ,armed ,forces of the ,united ,states1 the earned income advance amount shall be determined by taking into account the total wages of such employee1 as determined for purposes of section #cb4 7#c7 ,advance amount tables ,for purposes of paragraph 7#a77;,a77ii71 the tables issued by the ,secretary shall be similar in form to the tables issued under section #cdjb and1 to the extent feasible1 coordinated with such tables4 7d7 ,payments ,to be treated as payments of withholding and ,,fica taxes 7#a7 ,in general ,payments made by an employer under subsection 7a7 to an employee-- 7,a7 shall not be treated as payment of compensation1 and 7,b7 shall be treated as made out of-- 7i7 amounts required to be deducted and withheld for the payroll period under section #cdja1 7ii7 amounts required to be deducted for the payroll period under section #cajb1 and 7iii7 amounts of the taxes imposed for the payroll period under section #caaa1 as if the employer had paid to the ,secretary1 on the day on which the wages are paid to the employee1 an amount equal to such payments4 7#b7 ,advance payments exceed taxes due ,in the case of any employer1 if for any payroll period the aggregate amount of earned income advance payments exceeds the sum of the amounts referred to in paragraph 7#a77;,b71 the employer shall pay only so much of such earned income advance payment as does not exceed such sum1 and shall not make any further advance payments to the employee for the calendar year4 7#c7 ,failure to make advance payments ,failure to make any payment of an earned income advance amount as required under this section shall be treated as the failure at such time to deduct and withhold under chapter #bd an amount equal to the earned income advance amount4 7e7 ,submission of certificate 7#a7 ,effective period ,an eligibility certificate submitted to an employer at any time during the calendar year shall continue in effect with respect to the employee during such calendar year until revoked by the employee or until another such certificate takes effect under this section4 7#b7 ,requirement to revoke certificate ,in the case of an employee who has submitted an eligibility certificate under this section and subsequently becomes ineligible for the credit provided under section #cb for the taxable year1 the employee shall1 not later than #aj days after becoming ineligible for such credit1 submit to the employer a revocation of such certificate4 7#c7 ,form and contents of certificate ,eligibility certificates shall be in such form and contain such other information as the ,secretary may by regulations prescribe4 7f7 ,taxpayers making prior fraudulent or reckless claims 7#a7 ,in general ,no earned income advance amount shall be paid under this section for any taxable year in the disallowance period4 7#b7 ,disallowance period ,for purposes of paragraph 7#a71 the disallowance period is-- 7,a7 the period of #aj taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of an earned income advance amount under this section was due to fraud1 and 7,b7 the period of #b taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of an earned income advance amount under this section was due to reckless or intentional disregard of rules and regulations 7but not due to fraud74 7g7 ,taxable year ,the term taxable year means the last taxable year of the employee under subtitle ,a beginning in the calendar year in which the wages are paid4 7h7 ,,irs ,notification ,the ,internal ,revenue ,service shall take such steps as may be appropriate to ensure that taxpayers who receive a refund of the credit under section #cb are aware of the availability of earned income advance amounts under this section4 4 7#b7 ,coordination with advance payments ,section #cb is amended by inserting after subsection 7f7 the following new subsection3 7g7 ,coordination with advance payments of earned income credit 7#a7 ,recapture of advance payments ,if any payment is made to the individual by an employer under section #cejg during any calendar year1 then the tax imposed by this chapter for the individual's last taxable year beginning in such calendar year shall be increased by the aggregate amount of such payments4 7#b7 ,reconciliation of payments advanced and credit allowed ,any increase in tax under paragraph 7#a7 shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit 7other than the credit allowed by subsection 7a77 allowable under this part4 4 7#c7 ,filing requirement ,section #fjab7;a7 is amended-- 7,a7 in paragraph 7#g71 by striking and at the end2 7,b7 in paragraph 7#h71 by adding and at the end2 and 7,c7 by inserting after paragraph 7#h7 the following new paragraph3 7#i7 every individual who receives payments during the calendar year in which the taxable year begins under section #cejg4 4 7#d7 ,receipts for employees ,section #fjea7;a7 is amended by inserting after paragraph 7#f7 the following new paragraph3 7#g7 the total amount paid to the employee under section #cejg 7relating to advance payment of earned income credit71 4 7#e7 ,clerical amendment ,the table of sections for chapter #be of subtitle ,c is amended by inserting after the item relating to section #cejf the following new item3 ,sec4 #cejg4 ,advance payment of earned income credit4 4 7e7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4 #c4 ,permanent expansion and modification of child tax credit 7a7 ,permanence of certain special rules 7#a7 ,credit amount ,subsection 7a7 of section #bd is amended by striking #a1jjj and inserting #b1jjj4 7#b7 ,threshold amount ,paragraph 7#b7 of section #bd7;b7 is amended-- 7,a7 by striking #aaj1jjj in subparagraph 7,a7 and inserting #bjj1jjj2 7,b7 by striking #ge1jjj in subparagraph 7,b7 and inserting #aej1jjj2 and 7,c7 by striking #ee1jjj in subparagraph 7,c7 and inserting #ajj1jjj4 7#c7 ,partial credit allowed for certain other dependents2 elimination of maximum amount of refundable credit ,subsection 7h7 of section #bd is amended-- 7,a7 by striking paragraphs 7#a71 7#b71 7#c71 7#e71 and 7#f7 and by redesignating paragraphs 7#d7 and 7#g7 as paragraphs 7#a7 and 7#b71 respectively2 7,b7 by striking 7after the application of paragraph 7#b77 in subparagraph 7,a7 of paragraph 7#a71 as so redesignated2 7,c7 by striking paragraph 7#g7 in subparagraph 7,c7 of paragraph 7#a71 as so redesignated1 and inserting paragraph 7#b72 7,d7 by inserting for a taxable year beginning after ,december #ca1 #bjag1 and before ,january #a1 #bjbf1 after under this section in paragraph 7#b71 as so redesignated2 and 7,e7 by striking for taxable years #bjah through #bjbe in the heading4 7b7 ,increase in credit for young children ,subsection 7a7 of section #bd1 as amended by subsection 7a77#a71 is amended by striking #b1jjj and inserting #b1jjj 7#c1jjj in the case of a qualifying child who has not attained age #f74 7c7 ,adjustment for inflation ,section #bd is amended by redesignating subsection 7h71 as amended by subsection 7a77#c7 of this section1 as subsection 7i7 and by inserting after subsection 7g7 the following new subsection3 7h7 ,adjustment for inflation 7#a7 ,in general ,in the case of any taxable year beginning after #bjai1 each of the dollar amounts in subsection 7a7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjah for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7#b7 ,rounding ,if any amount as adjusted under paragraph 7#a7 is not a multiple of #ej1 such amount shall be rounded to the next lowest multiple of #ej4 4 7d7 ,modification of qualifying child definition ,paragraph 7#a7 of section #bd7;c7 is amended by inserting 1 determined without regard to paragraph 7#a77;,d7 thereof after section #aeb7;c74 7e7 ,treatment as fully refundable 7#a7 ,credit moved to subpart relating to refundable credits 7,a7 ,in general ,the ,internal ,revenue ,code of #aihf is amended-- 7i7 by redesignating section #bd1 as amended by this section1 as section #cf;,c2 and 7ii7 by moving such section1 as so redesignated1 from subpart ,a of part ,,iv of subchapter ,a of chapter #a to the location immediately after section #cf;,b in subpart ,c of part ,,iv of subchapter ,a of chapter #a4 7,b7 ,technical amendments 7i7 ,subsection 7a7 of section #cf;,c1 as moved and redesignated by subparagraph 7,a71 is amended by striking this chapter and inserting this subtitle4 7ii7 ,section #cf;,c1 as so moved and redesignated1 is amended-- 7,i7 by striking subsection 7d72 and 7,,ii7 by redesignating subsection 7i7 as subsection 7d71 and by moving such subsection to the location immediately after subsection 7c74 7,c7 ,partial credit for other dependents nonrefundable ,paragraph 7#a7 of subsection 7d7 of section #cf;,c1 as moved and redesignated by subparagraph 7,b77ii71 is amended by adding at the end the following new subparagraph3 7,d7 ,portion of credit nonrefundable ,the amount of the credit allowed under this paragraph-- 7i7 shall not be treated as a credit allowed under this subpart1 and 7ii7 shall not be taken into account in determining the amount of the credit under this section for purposes of section #gebg;,a4 4 7,d7 ,clerical amendments 7i7 ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a is amended by striking the item relating to section #bd4 7ii7 ,the table of sections for subpart ,c of part ,,iv of subchapter ,a of chapter #a is amended by adding at the end the following new item3 ,sec4 #cf;,c4 ,child tax credit4 4 7#b7 ,advance payment of credit 7,a7 ,in general ,section #cf;,c1 as amended by the preceding provisions of this section1 is amended by adding at the end the following new subsection3 7i7 ,reconciliation of credit and advance credit 7#a7 ,in general ,the amount of the credit allowed under this section for any taxable year shall be reduced 7but not below zero7 by the aggregate amount of any advance payments of such credit under section #gebg;,a for such taxable year4 7#b7 ,excess advance payments ,if the aggregate amount of advance payments under section #gebg;,a for the taxable year exceed the amount of the credit allowed under this section for such taxable year 7determined without regard to paragraph 7#a771 the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess4 4 7,b7 ,advance payment ,chapter #gg is amended by inserting after section #gebg the following new section3 #gebg;,a4 ,advance payment of child tax credit 7a7 ,in general ,as soon as practicable and not later than #a year after the date of the enactment of this section1 the ,secretary shall establish a program for making advance payments of the credit allowed under section #cf;,c 7determined without regard to subsection 7i77#a7 of such section7 on a monthly basis1 or as frequently as the ,secretary determines to be administratively feasible1 to taxpayers allowed such credit4 7b7 ,limitation 7#a7 ,in general ,the ,secretary may make payments under subsection 7a7 only to the extent that the total amount of such payments made to any taxpayer during the taxable year does not exceed an amount equal to the excess1 if any1 of-- 7,a7 subject to paragraph 7#b71 the amount determined under section #cf;,c with respect to such taxpayer 7determined without regard to subsection 7i7 of such section7 for such taxable year1 over 7,b7 the estimated tax imposed by subtitle ,a1 as reduced by the credits allowable under subparts ,a and ,c 7with the exception of section #cf;,c7 of such part ,,iv1 with respect to such taxpayer for such taxable year1 as determined in such manner as the ,secretary deems appropriate4 7#b7 ,application of threshold amount limitation ,the program described in subsection 7a7 shall make reasonable efforts to apply the limitation of section #cf;,c7b7 with respect to payments made under such program4 4 7,c7 ,clerical amendment ,the table of sections for chapter #gg is amended by inserting after the item relating to section #gebg the following new item3 ,sec4 #gebg;,a4 ,advance payment of child tax credit4 4 7#c7 ,conforming amendments 7,a7 ,subparagraph 7,b7 of section #de,r7f77#c7 is amended to read as follows3 7,b7 ,special rule ,any amounts paid pursuant to an agreement under section #caba7l7 7relating to agreements entered into by ,american employers with respect to foreign affiliates7 which are equivalent to the taxes referred to in subparagraph 7,a7 shall be treated as taxes referred to in such subparagraph4 4 7,b7 ,section #aeb7;f77#f77;,b77ii7 is amended by striking section #bd and inserting section #cf;,c4 7,c7 ,paragraph 7#bf7 of section #eja7;c7 is amended in the flush matter at the end by striking section #bd7;c77 and inserting section #cf;,c7c774 7,d7 ,section #fbaa7;b77#d77;,a7 is amended-- 7i7 by striking #bd7;d712 and 7ii7 by striking and #cf;,b1 #afh7k77#d7 and inserting #cf;,b1 and #cf;,c4 7,e7 ,section #fbac7;g77#b7 is amended-- 7i7 in subparagraph 7,i71 by striking section #bd7;e7 and inserting section #cf;,c7e72 7ii7 in subparagraph 7,l71 by striking #bd1 or #cb and inserting #cb1 or #cf;,c2 and 7iii7 in subparagraph 7,p7-- 7,i7 by striking #bd7;g77#b7 and inserting #cf;,c7g77#b72 and 7,,ii7 by striking section #bd and inserting section #cf;,c4 7,f7 ,section #fdjb7m7 is amended by striking section #bd 7by reason of subsection 7d7 thereof7 or #cb and inserting section #cb or #cf;,c4 7,g7 ,section #ffie7;g77#b7 is amended by striking #bd1 #be;,a7a77#a71 or #cb and inserting #be;,a7a77#a71 #cb1 or #cf;,c4 7,h7 ,paragraph 7#b7 of section #acbd7;b7 of title #ca1 ,united ,states ,code1 is amended by inserting 1 #cf;,c7a7 after #cf;,b4 7,i7 ,section #afac7;a77#aa7 of the ,social ,security ,act 7#db ,u4,s4,c4 #achb;b7a77#aa77 is amended by striking section #bd of the ,internal ,revenue ,code of #aihf 7relating to child tax credit7 by reason of subsection 7d7 thereof and inserting section #cf;,c of the ,internal ,revenue ,code of #aihf 7relating to child tax credit71 and any payment made to such individual 7or such spouse7 under section #gebg;,a of such ,code 7relating to advance payment of child tax credit74 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4 #d4 ,earned income credit expansion for ,puerto ,rico 7a7 ,in general ,subsequent to an amendment of the ,puerto ,rico ,internal ,revenue ,code of #bjaa expanding the earned income credit added by ,act #beg in a similar manner as the amendments made by section #b of this ,act1 the ,secretary of the ,treasury shall make annual payments to ,puerto ,rico in the amount determined under subsection 7b74 ,such payments shall be made within a reasonable period of time before the due date for the income tax in ,puerto ,rico each year1 and shall be made only if ,puerto ,rico provides to the ,secretary of the ,treasury-- 7#a7 an estimate1 certified by the ,financial ,oversight and ,management ,board for ,puerto ,rico1 of the cost of such expansion in the first year2 and 7#b7 annually thereafter1 a report of the actual cost of such expansion in the preceding year and an estimate1 certified by such ,board1 of the cost of such expansion in the year of the report4 7b7 ,amount determined ,for purposes of subsection 7a71 the amount determined with respect to any year is so much of the estimated cost 7as reported under subsection 7a77 of the expansion of the earned income credit in ,puerto ,rico for such year as does not exceed #bjd1jjj1jjj1 as applicable-- 7#a7 reduced by the excess1 if any1 of-- 7,a7 the amount of the payments made to ,puerto ,rico under this section for the preceding year2 over 7,b7 the actual cost 7as reported under subsection 7a77 of the expansion of the earned income credit in ,puerto ,rico for such preceding year2 or 7#b7 increased by the excess1 if any1 of the amount described in paragraph 7#a77;,b7 over the amount described in paragraph 7#a77;,a74 7c7 ,cost of expansion ,for purposes of this section1 the cost of expanding the earned income credit in ,puerto ,rico as described in subsection 7a7 shall include only the cost of the amendments made as described in such subsection1 and shall not include the cost of laws in effect as of the date of the enactment of this ,act4 7d7 ,reporting requirements ,the ,treasury of ,puerto ,rico shall submit to the ,secretary of the ,treasury an annual report on the earned income credit of ,puerto ,rico1 including the number of beneficiaries1 average benefits for different households1 participation rates for eligible populations1 error rates and other compliance matters1 and the effects of the credit on labor force participation and poverty reduction4 7e7 ,outreach grant ,in addition to the payments under subsection 7a71 the ,secretary of the ,treasury shall make a one-time grant in the amount of #e1jjj1jjj to ,puerto ,rico for the purpose of taxpayer education efforts relating to the earned income credit1 including education of paid preparers4 7f7 ,appropriations ,such sums as are necessary1 not to exceed-- 7#a7 #bji1jjj1jjj in the first year after enactment of the amendment described in subsection 7a72 and 7#b7 except as provided in subsection 7g71 #bjd1jjj1jjj in each year thereafter 7as long as ,puerto ,rico maintains an earned income credit as described in subsection 7a771 are hereby appropriated to the ,secretary of the ,treasury to carry out the purposes of this section4 7g7 ,adjustment for inflation 7#a7 ,in general ,for each calendar year beginning after the year described in subsection 7f77#a71 the #bjd1jjj1jjj amount under subsections 7b7 and 7f77#b7 shall be increased by an amount equal to-- 7,a7 such dollar amount2 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 of the ,internal ,revenue ,code of #aihf1 determined by substituting the calendar year preceding the year described in subsection 7f77#a7 for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7#b7 ,rounding ,if any amount adjusted under paragraph 7#a7 is not a multiple of #ejj1 such amount shall be rounded to the next lowest multiple of #ejj4 #e4 ,regulation of tax return preparers 7a7 ,in general ,subsection 7a7 of section #ccj of title #ca1 ,united ,states ,code1 is amended-- 7#a7 by striking paragraph 7#a7 and inserting the following3 7#a7 regulate-- 7,a7 the practice of representatives of persons before the ,department of the ,treasury2 and 7,b7 the practice of tax return preparers2 and 2 and 7#b7 in paragraph 7#b7-- 7,a7 by inserting or a tax return preparer to prepare tax returns after practice2 7,b7 by inserting or tax return preparer before demonstrate2 and 7,c7 by inserting or in preparing their tax returns1 claims for refund1 or documents in connection with tax returns or claims for refund after cases in subparagraph 7,d74 7b7 ,authority ,to sanction regulated tax return preparers ,subsection 7c7 of section #ccj of title #ca1 ,united ,states ,code1 is amended-- 7#a7 by striking before the ,department2 7#b7 by inserting or tax return preparer after representative each place it appears2 and 7#c7 in paragraph 7#d71 by striking misleads or threatens and all that follows and inserting misleads or threatens-- 7,a7 any person being represented or any prospective person being represented2 or 7,b7 any person or prospective person whose tax return1 claim for refund1 or document in connection with a tax return or claim for refund1 is being or may be prepared4 4 7c7 ,minimum competency standards for tax return preparers ,section #ccj of title #ca1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7f7 ,tax return preparers 7#a7 ,in general ,any tax return preparer shall demonstrate minimum competency standards under this subsection by-- 7,a7 obtaining an identifying number for securing proper identification of such preparer as described in section #faji7;a77#d7 of the ,internal ,revenue ,code of #aihf2 7,b7 satisfying any examination and annual continuing education requirements as prescribed by the ,secretary2 and 7,c7 completing a background check administered by the ,secretary4 7#b7 ,exemption ,the ,secretary shall exempt tax return preparers who have been subject to comparable examination1 continuing education requirements1 and background checks administered by the ,secretary or any comparable ,state licensing program4 ,such exemption shall extend directly to individuals who are supervised by such preparers and are not required to secure an identification number under section #faji7;a77#d74 4 7d7 ,tax return preparer defined ,section #ccj of title #ca1 ,united ,states ,code1 as amended by subsection 7c71 is amended by adding at the end the following new subsection3 7g7 ,tax return preparer ,for purposes of this section-- 7#a7 ,in general ,the term tax return preparer has the meaning given such term under section #ggja7;a77#cf7 of the ,internal ,revenue ,code of #aihf4 7#b7 ,tax return ,the term tax return has the meaning given to the term return under section #ffif7;e77#a7 of the ,internal ,revenue ,code of #aihf4 7#c7 ,claim for refund ,the term claim for refund has the meaning given such term under section #ffif7;e77#b7 of such ,code4 4 7e7 ,amendments with respect to identifying number 7#a7 ,in general ,section #faji7;a7 is amended by striking paragraph 7#d7 and inserting the following3 7#d7 ,furnishing identifying number of tax return preparer 7,a7 ,in general ,any return or claim for refund prepared by a tax return preparer shall bear such identifying number for securing proper identification of such preparer1 his employer1 or both1 as may be prescribed4 ,for purposes of this paragraph1 the terms return and claim for refund have the respective meanings given to such terms by section #ffif7;e74 7,b7 ,exception ,subparagraph 7,a7 shall not apply to any tax return preparer who prepares a return or claim for refund under the supervision and direction of a tax return preparer who signs the return or claim for refund and is a certified public accountant1 an attorney or enrolled agent4 4 7#b7 ,clarification of rescission authority ,section #faji is amended by inserting after subsection 7d7 the following new subsection3 7e7 ,authority ,to rescind identifying number of tax return preparer 7#a7 ,in general ,the ,secretary may rescind an identifying number issued under subsection 7a77#d7 if-- 7,a7 after notice and opportunity for a hearing1 the preparer is shown to be incompetent or disreputable 7as such terms are used in subsection 7c7 of section #ccj of title #ca1 ,united ,states ,code71 and 7,b7 rescinding the identifying number would promote compliance with the requirements of this title and effective tax administration4 7#b7 ,records ,if an identifying number is rescinded under paragraph 7#a71 the ,secretary shall place in the file in the ,office of the ,director of ,professional ,responsibility the opinion of the ,secretary with respect to the determination1 including-- 7,a7 a statement of the facts and circumstances relating to the determination1 and 7,b7 the reasons for the rescission4 4 7f7 ,,gao study and report on the exchange of information between the ,,irs and ,state taxation authorities 7#a7 ,in general ,not later than #ah months after the date of the enactment of this ,act1 the ,comptroller ,general shall conduct a study and submit to ,congress a report on the sharing of information between the ,secretary of the ,treasury and ,state authorities1 as authorized under section #fajc7;d7 of the ,internal ,revenue ,code of #aihf1 regarding identification numbers issued to paid tax return preparers and return preparer minimum standards4 7#b7 ,increased information sharing ,the study and report described in paragraph 7#a7 shall include an analysis of the impact that increased information sharing between ,federal and ,state authorities would have on efforts to enforce minimum standards on paid tax return preparers4