Chuck Grassley: “I share concern with the impact that Katrina will have on the ability of low wage working families who qualify for the…”

“I share concern with the impact that Katrina will have on the ability of low wage working families who qualify for the child tax credit and the earned income tax credit to receive them for the 2005 tax year. In addition, I certainly agree that something must be done to address this problem for families who generously gave of themselves and took in a child displaced by Katrina but may lack the proper formal authorization that would prevent them from receiving the EITC they qualify for and would otherwise get. To help address this problem, I would urge the IRS to accept a child placement decision by an authorized agency as being retroactive to the earliest point in 2006 when the taxpayer first took in the child. This would apply only to children who had resided in a hurricane disaster zone in 2005 as defined under HKTRA and under any subsequent legislation extending HKTRA provisions to Rita and Wilma survivors. I have been advised that the IRS has the ability to adopt this approach under section 407 of HKTRA and any equivalent extension to Rita and Wilma survivors--that enables the Secretary to make adjustments in application of rules to ensure that hurricane survivors do not lose tax benefits. I know my colleague from Montana joins me in urging the IRS to use this authority to help these foster care families who so generously took in children displaced by Katrina.”