Abstract

http://ssrn.com/abstract=2412035
 


 



Reckless Means Reckless: Understanding the EITC Ban


John Thomas Plecnik


Cleveland State University - Cleveland-Marshall College of Law

March 20, 2014

Tax Notes, Vol. 142, No. 8, 2014
Cleveland-Marshall Legal Studies Paper No. 14-266

Abstract:     
Under section 32(k), a little-known subsection introduced to the code by the Taxpayer Relief Act of 1997, the earned income tax credit is disallowed if a taxpayer improperly claimed that credit in a prior tax year. This disallowance is best known to tax practitioners as the EITC ban. If the improper EITC claim is attributable to "reckless or intentional disregard of rules and regulations," the ban is imposed for a two-year period. The IRS does not recognize a formal definition for reckless or intentional disregard under section 32(k), and it imposes the EITC ban without a clear explanation in nearly 90 percent of cases. This article argues that the legislative history of the EITC ban demonstrates that Congress intended to import to section 32(k) the well-established definition for reckless or intentional disregard from section 6662, which imposes the accuracy-related penalties.

Number of Pages in PDF File: 5

Keywords: earned income tax credit, EITC, earned income tax credit ban, EITC ban, earned income credit, earned income credit ban, two year ban, reckless or intentional disregard, reckless, recklessness, 32(k), 6662, accuracy-related penalties, Internal Revenue Service, IRS, National Taxpayer Advocate, penalty

JEL Classification: K34

Accepted Paper Series





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Date posted: March 21, 2014  

Suggested Citation

Plecnik, John Thomas, Reckless Means Reckless: Understanding the EITC Ban (March 20, 2014). Tax Notes, Vol. 142, No. 8, 2014; Cleveland-Marshall Legal Studies Paper No. 14-266. Available at SSRN: http://ssrn.com/abstract=2412035

Contact Information

John Thomas Plecnik (Contact Author)
Cleveland State University - Cleveland-Marshall College of Law ( email )
2121 Euclid Avenue, LB 138
Cleveland, OH 44115-2214
United States

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