Taxpayer Abuse Prevention Act

        [Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 969 Introduced in House (IH)]

109th CONGRESS
1st Session
H. R. 969

To provide additional protections for recipients of the earned income
tax credit, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

February 17, 2005

Ms. Schakowsky (for herself, Ms. Solis, Ms. Norton, Mr. Evans, Mr.
McGovern, Mr. Doggett, Mr. Serrano, Mr. Wexler, Mr. Brady of
Pennsylvania, Mr. Sanders, Ms. Kilpatrick of Michigan, Mr. Butterfield,
Mr. McDermott, Mr. Stark, Mr. Nadler, Ms. Wasserman Schultz, Ms.
Watson, Ms. Carson, and Ms. Woolsey) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition
to the Committee on Financial Services, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

A BILL

To provide additional protections for recipients of the earned income
tax credit, and for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Taxpayer Abuse Prevention Act''.

SEC. 2. PREVENTION OF DIVERSION OF EARNED INCOME TAX CREDIT BENEFITS.

(a) In General.--Section 32 of the Internal Revenue Code of 1986
(relating to earned income tax credit) is amended by adding at the end
the following new subsection:
``(n) Prevention of Diversion of Credit Benefits.--The right of any
individual to any future payment of the credit under this section shall
not be transferable or assignable, at law or in equity, and none of the
moneys paid or payable or right shall be subject to any execution,
levy, attachment, garnishment, offset, or other legal process except
for any outstanding Federal obligation. Any waiver of the protections
of this subsection shall be deemed null, void, and of no effect.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.

SEC. 3. PROHIBITION ON DEBT COLLECTION OFFSET.

(a) In General.--No person shall, directly or indirectly,
individually or in conjunction or in cooperation with another person,
engage in the collection of an outstanding or delinquent debt for any
creditor or assignee by means of soliciting the execution of,
processing, receiving, or accepting an application or agreement for a
refund anticipation loan or refund anticipation check that contains a
provision permitting the creditor to repay, by offset or other means,
an outstanding or delinquent debt for that creditor from the proceeds
of the debtor's Federal tax refund.
(b) Refund Anticipation Loan.--For purposes of subsection (a), the
term ``refund anticipation loan'' means a loan of money or of any other
thing of value to a taxpayer because of the taxpayer's anticipated
receipt of a Federal tax refund.
(c) Effective Date.--This section shall take effect on the date of
the enactment of this Act.

SEC. 4. PROHIBITION OF MANDATORY ARBITRATION.

(a) In General.--Any person that provides a loan to a taxpayer that
is linked to or in anticipation of a Federal tax refund for the
taxpayer may not include mandatory arbitration of disputes as a
condition for providing such a loan.
(b) Effective Date.--This section shall apply to loans made after
the date of the enactment of this Act.

SEC. 5. TERMINATION OF DEBT INDICATOR PROGRAM.

The Secretary of the Treasury shall terminate the Debt Indicator
program announced in Internal Revenue Service Notice 99-58.

SEC. 6. DETERMINATION OF ELECTRONIC FILING GOALS.

(a) In General.--Any electronically filed Federal tax returns, that
result in Federal tax refunds that are distributed by refund
anticipation loans, shall not be taken into account in determining if
the goals required under section 2001(a)(2) of the Restructuring and
Reform Act of 1998 that the Internal Revenue Service have at least 80
percent of all such returns filed electronically by 2007 are achieved.
(b) Refund Anticipation Loan.--For purposes of subsection (a), the
term ``refund anticipation loan'' means a loan of money or of any other
thing of value to a taxpayer because of the taxpayer's anticipated
receipt of a Federal tax refund.

SEC. 7. EXPANSION OF ELIGIBILITY FOR ELECTRONIC TRANSFER ACCOUNTS.

(a) In General.--The last sentence of section 3332(j) of title 31,
United States Code, is amended by inserting ``other than any payment
under section 32 of such Code'' after ``1986''.
(b) Effective Date.--The amendment made by this section shall apply
to payments made after the date of the enactment of this Act.

SEC. 8. PROGRAM TO ENCOURAGE THE USE OF THE ADVANCE EARNED INCOME TAX
CREDIT.

(a) In General.--Not later than 6 months after the date of the
enactment of this Act, the Secretary of the Treasury shall, after
consultation with such private, nonprofit, and governmental entities as
the Secretary determines appropriate, develop and implement a program
to encourage the greater utilization of the advance earned income tax
credit.
(b) Reports.--Not later than the date of the implementation of the
program described in subsection (a), and annually thereafter, the
Secretary of the Treasury shall report to the Committee on Finance of
the Senate and the Committee on Ways and Means of the House of
Representatives on the elements of such program and progress achieved
under such program.
(c) Authorization of Appropriations.--There is authorized to be
appropriated such sums as are necessary to carry out the program
described in this section. Any sums so appropriated shall remain
available until expended.

SEC. 9. PROGRAM TO LINK TAXPAYERS WITH DIRECT DEPOSIT ACCOUNTS AT
FEDERALLY INSURED DEPOSITORY INSTITUTIONS.

(a) Establishment of Program.--Not later than 1 year after the date
of the enactment of this Act, the Secretary of the Treasury shall enter
into cooperative agreements with federally insured depository
institutions to provide low- and moderate-income taxpayers with the
option of establishing low-cost direct deposit accounts through the use
of appropriate tax forms.
(b) Federally Insured Depository Institution.--For purposes of this
section, the term ``federally insured depository institution'' means
any insured depository institution (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)) and any insured credit
union (as defined in section 101 of the Federal Credit Union Act (12
U.S.C. 1752)).
(c) Operation of Program.--In providing for the operation of the
program described in subsection (a), the Secretary of the Treasury is
authorized--
(1) to consult with such private and nonprofit
organizations and Federal, State, and local agencies as
determined appropriate by the Secretary, and
(2) to promulgate such regulations as necessary to
administer such program.
(d) Authorization of Appropriations.--There is authorized to be
appropriated such sums as are necessary to carry out the program
described in this section. Any sums so appropriated shall remain
available until expended.
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