Janet Yellen urges House Democrats to give the IRS more power to crack down on tax evasion.

0
8

Treasury Secretary Janet L. Yellen is pressuring Representative Richard Neal, Democratic Chairman of the Ways and Means Committee, to include the Biden administration’s comprehensive proposal to strengthen the Internal Revenue Service in its agenda spending $ 3.5 trillion, arguing that more resources and increased powers to catch tax evaders is crucial to closing the “tax gap.”

In a letter to Mr Neal, Ms Yellen urged lawmakers not to dilute a central element of the proposal, which would give the Internal Revenue Service visibility into taxpayer financial accounts through stricter reporting requirements. . Treasury officials say this will allow the agency to better crack down on the rich and companies that don’t pay what they owe.

ALSO READ  Biden will meet with executives to tout the vaccine mandates.

Legislation released by House Democrats earlier this week included the additional $ 80 billion in funding for the IRS that the Biden administration had proposed to help increase staffing and enforcement capacity. However, a separate proposal to enact an “information reporting” regime was missing from the bill.

“When considering specific policy choices when designing an information reporting regime, it is important to ensure that the reporting regime is sufficiently comprehensive, so that tax evaders are not in a position to structure financial accounts to avoid it, ”Ms. Yellen wrote. “Any suggestion that this whistleblowing regime will instead be used to target law enforcement efforts on ordinary Americans is totally wrong.”

ALSO READ  "Impeachment" se concentre sur les femmes derrière les scandales de Clinton

Critics of the proposal have argued that giving the IRS more power to review taxpayer financial information is an invasion of privacy and said it could lead to frivolous audits for political reasons. The Biden administration insists that verification rates will not increase for taxpayers who earn less than $ 400,000.

In an addendum to the letter, Mark J. Mazur, Acting Assistant Secretary of the Treasury for Tax Policy, reiterated Treasury estimates that the investment in enforcement staff and the new reporting powers of information could generate $ 700 billion in government revenue over a decade. He suggested Congress might consider including a more modest reporting mechanism and cautioned that this would be less effective.

ALSO READ  4% to 45%: Biden sets ambitious target for solar energy

“Obviously, this will reduce the estimated revenues generated by the proposed reporting regime compared to the administration’s previous estimates,” Mazur wrote.

In a hearing on Wednesday, Mr Neal said he received the letters and stressed the importance of strengthening tax law enforcement without adding new burdens on small businesses.

“We are in talks with the administration on reporting proposals that target sophisticated tax avoidance and evasion without impacting the middle class and working Americans,” Neal said.

LEAVE A REPLY

Please enter your comment!
Please enter your name here