The Senate Appropriations Committee is proposing to increase the length of the Schedule EIC for claiming the Earned Income Tax Credit, requiring taxpayers to include much the same information on self-prepared returns that paid tax preparers are required to ask them on the EITC due diligence checklist.
The proposed changes are aimed at reducing the high improper payments rate for EITC claims, but they could also have the effect of discouraging many low-income working taxpayers from filing the form. The proposal was included in a
The requirements would reportedly increase the size of the EITC form from one page to four or five pages with additional questions to verify eligibility for the tax credit, greatly complicating the form. The Senate Appropriations Committee has also asked for similar questions to be added to forms to verify eligibility for other refundable tax credits, such as the Child tax Credit, the American Opportunity Tax Credit for tuition and the Premium Tax Credit for health care coverage, according to the
H&R Block has been accused of lobbying for increasing the EITC requirements in order to encourage more taxpayers to use the services of paid tax preparers. The company responded to the recent reports with a
“Recent media coverage around H&R Block and the Earned Income Tax Credit (EITC) is misleading and diverts attention from the real issues,” said Block. “This is not about competitive business interests. It’s about reducing fraud and protecting the future of the EITC. Anyone who says differently is not really committed to fixing a gaping hole in EITC eligibility or to reducing the billions of dollars in improper EITC payments that occur every year.”
Block pointed out that the Treasury Department estimated that $16 billion to $19 billion in improper EITC payments were paid out in 2014. “Many recipients likely elected to use do-it-yourself software because the IRS doesn’t require DIYers to provide the same level of information as those who use a paid preparer,” said the company.
