If an individual is found to have committed intentional fraud related to the Earned Income Tax Credit, what is the penalty?

When intentional fraud is committed concerning the Earned Income Tax Credit (EITC), the consequences are quite severe due to the nature of the offense. A crucial aspect of the penalties involves the repayment of the amount fraudulently claimed, which must be repaid plus interest.

The important factor here is the restrictions placed on future claims of the EITC. Once an individual is found to have committed fraud, they are barred from claiming the credit not just for the immediate next year, but for a significant additional time period. The law stipulates a penalty that can extend for an additional ten years, reflecting the serious ramifications of fraudulent activity in tax law. This extended period is designed to act as a deterrent against future fraudulent claims.

In summary, the correct choice recognizes these punitive measures, which include repayment, interest, and a ten-year disqualification from claiming the credit, emphasizing the seriousness with which tax fraud is treated in relation to the EITC.