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Description of Proposal
The proposal clarifies that the identification
requirement is a requirement for claiming the EIC [earned
income credit], rather than an element of the definition
of “qualifying child”. Thus, the tie-breaker rule would
apply where more than one individual otherwise could claim
the same child as a qualifying child on their respective
tax returns, regardless of whether the child is listed on
any tax return. * * *
* * * * * * *
Analysis
Proponents of the clarification believe that it is
necessary to provide the EIC efficiently and
appropriately. * * * They continue that the tie-breaker is
necessary in all cases where more than one taxpayer could
claim the same qualifying child, to ensure that only needy
taxpayers receive the EIC. For example, a taxpayer with
a qualifying child should not qualify for the EIC if that
taxpayer is sharing a household with the taxpayer’s own
higher-income parent. To allow these taxpayers to
essentially elect out of the tie-breaker rule by failing
to claim the child on the return of the higher-income
parent would undermine Congressional intent with regards
to the EIC.
Staff of Joint Comm. on Taxation, Description of Revenue Provisions
Contained in the President’s Fiscal Year 1999 Budget Proposal, at
217 (J. Comm. Print 1998). Thus, Congress was concerned that before
the 1998 amendment, taxpayers could structure their income tax
returns so that they would receive the earned income credit when
they would not have otherwise been eligible.
The legislative history of the 1998 amendment supports our
conclusion that respondent properly applied this amendment. The
1998 amendment is rationally related to a legitimate legislative
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