Senate Proposes to Add Pages to Schedule EIC

[Elrod]

(Accounting Today) - 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.

http://www.accountingtoday.com/news/tax-practice/senate-proposes-to-increase-eitc-requirements-75628-1.html

 

Edited August 28, 2015 by Elrod

[JohnH]

Why don't they dispense with all the paperwork on the tax return and require the taxpayer to come in and have a sit-down with someone whose job it is to handle this sort of matter?  Someone who has the training and qualifications to evaluate whether their income & family situation justify receiving a check from the government.  Like perhaps a social worker.

Edited August 28, 2015 by JohnH

[Catherine]

Why don't they dispense with all the paperwork on the tax return and require the taxpayer to come in and have a sit-down with someone whose job it is to handle this sort of matter?  Someone who has the training and qualifications to evaluate whether their income & family situation justify receiving a check from the government.  Like perhaps a social worker.

Because there are FAR too many social workers who cannot add 2 + 2 and come up with 4?  Or - being used to gaming the system to get services - will tell folks who "really need the money" to finagle the numbers to come up with big refunds, not realizing (or caring, perhaps) that it is tax fraud?  

[MDEA]

I thought that is what we do. In my practice that is what we do. We determine If they are entitled to EITC & CTC.

[Lee B]

Copied from the same article:

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 Center on Budget and Policy Priorities and Vox.

[JohnH]

I think we are onto something here. 

Tax preparation should be handled by tax preparers, and public assistance should be handled by public-employee social workers.

Everybody being able to just do their job would probably increase efficiency and put the responsibility where it belongs.

Edited August 28, 2015 by JohnH

[SaraEA]

When President Clinton reformed welfare "as we know it," it was largely replaced by the EITC.  The difference was that you had to have earned income to get it  (as in EARNED Income Tax Credit).  Welfare rolls dropped precipitously as former recipients went to work.  Welfare office employees had to retool from determining eligibility for free money to getting people into jobs and training programs.  For a while it worked out just as planned.

Eventually electronic filing grew and DIY software came on the scene.  Instead of filling out forms and pages of worksheets, people learned how to plug numbers into a computer.  If they didn't like the result, they'd play with the numbers.  Crooks came out of the woodwork, and we know where that's gotten us.

The EITC is a godsend for many working families and each year lifts millions of children above poverty level.  And I think it's a lot better than welfare when people got money for doing nothing.  That said, it doesn't belong in the tax system.  The welfare workers are trained in determining eligibility for various benefits and helping people gather the documentation needed for proof.  Tax professionals have learned what questions to ask as part of due diligence but are not required to examine things like birth certificates and school records.  We should do people's tax returns which they can then take to their local welfare office to apply for EITC.  Let the real experts in that sort of thing do that job.

Congress will never agree because they have worked so hard to separate "welfare" from the EITC.  It plays better with voters that way.

[MDEA]

I do not know about you but I check birth certificates and school records of all children that are not direct descendants.Tax offices that do a large volume of EITC learn to check those items to avoid audits.

[Catherine]

When a client comes in one year obviously pregnant, and the next year with a six-month-old in a car seat carrier, I feel justified in not asking for the birth certificate.  DOB and ssn, yes.  

[Abby Normal]

I'm so glad I have very few of these types of clients.