Sigma Tax Pro has confirmed that new legislation approved by the house will tighten up child tax credits to reduce fraud and will impact tax preparation businesses.
Delray Beach, FL (PRWEB) August 12, 2014
The Child Tax Credit Improvement Act, known as H.R. 4936,would adjust the amount of the refundable tax credit, currently set at $1,000, for inflation. Sam Johnson, R-Texas put forward the bill with a view to reduce commonplace fraud associated with the child tax credits and also protect taxpayers. The act would require anyone claiming the credit to provide their social security numbers to be able to benefit from the tax credit. This requirement is already mandatory for the Earned Income Tax Credit and was used as a fraud prevention measure in the 1996 Welfare Reform law. Jody Dovich from Sigma Tax Pro hopes that adjusting the credit for inflation will provide an extra benefit for couples who file joint returns and also eliminate the marriage penalty in the current version of the child tax credit.
A report by the Treasury Inspector General for Tax Administration highlights the potential for fraud that exists with child tax credit. The report pointed out that the number of individuals filing for the Additional Child Tax Credit without a Social Security Number increased exponentially from 62,000 filers in 2000 to 2.3 million filers in 2010. Jody Dovich, of Sigma Tax Pro states, “there is a need to reduce fraud but many are concerned as the expanded refundable portion of the Child Tax Credit expiring in 2017 is not addressed in the bill.” This typically affects the lowest income families and would potentially increase the number of families living below the poverty line. It is certain that all tax professionals will need to be well versed in the new act as it will affect a number of their clients.
Sigma Tax Pro provides a full range of essential services for tax pros.This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base. Clients can already renew their software licenses for next year’s tax season and ensure the lowest pricing available in the industry.
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