Bill would curb abuse of tax credit
I respond to Nov. 24 Dispatch.com article “Ohio lawmakers introduce plenty of bills, but only a few will pass.” The point about the ineffectiveness of Washington is well taken; I agree. Change in Washington is slow, and too many career politicians are preventing meaningful change from happening. I was a businessman for 30 years, and in the business world, this ineffectiveness doesn’t work.
I’ve introduced a bill addressing improper payments under the Earned Income Tax Credit (EITC). The Improper Tax Payments Reduction Act was included in the Tax Cuts and Jobs Act, House Resolution 1, which passed out of the House on Nov. 16.
EITC was set up to reduce the amount of tax on middle- to low-income workers and might provide a refund. Now, don’t get me wrong, I very much support the EITC program, which incentivizes work while providing a refundable tax credit to qualifying taxpayers. However, this program is riddled with fraud and error. In fact, it’s the only program to be labeled “high risk” by the nonpartisan Office of Management and Budget and by the Internal Revenue Service during the Obama administration.
The Treasury inspector general found that in the 2015 fiscal year, one-quarter of payments were improper, costing taxpayers $16 billion that year alone.
This issue really hits home for me. As some of you may know, I was the victim of identity theft. Someone falsely filed my 2014 tax return, stealing my wife’s and my Social Security numbers. My legislation, helps prevent this fraud and will not take one penny of EITC money from any deserving families. What it will do is prevent my constituents’ hard-earned dollars from being improperly spent.
It will provide the IRS with information vital to fraud prevention long before it pays out on the EITC, clarify existing law to prevent misstatements of income, and encourage information verification when there are reporting discrepancies.
This will prevent payments from being made, when it’s impossible to resolve discrepancies, but only after the taxpayer is provided with the opportunity to resolve any issue.
Rep. Jim Renacci Congressional District 16 Wadsworth