Domestic Taxes

The acting chief of the IRS told lawmakers on Wednesday that taxpayers would soon start feeling the effect of sequestration, now that the filing season has concluded.

Steven Miller, the acting commissioner, told a Senate Appropriations subcommittee that taxpayers calling the IRS for advice would soon be affected by the automatic spending cuts, and that the agency’s ability to collect revenues and battle fraud would also be impacted.

Sequestration, Miller added, will only exacerbate recent cuts in the IRS budget. IRS and Treasury officials say that rolling back the tax-collecting agency’s budget is short-sighted, because a dollar spent at the IRS produces several times that amount in new revenues.

“Without a change in the current budget environment, the American people will see erosion in our ability to serve them, and the federal government will see fewer receipts from our enforcement efforts,” Miller said at the Wednesday hearing. Read more...

Sen. Rand Paul (R-Ky.) introduced legislation this week to roll back key portions of a law that seeks to crack down on offshore tax cheats, his office said Wednesday.

Paul said in a statement that the law, the Foreign Account Tax Compliance Act (FATCA), would fall far short of its goals on tax evasion, all while opening up “a host of unanticipated destructive consequences.”

Those consequences, Paul said, include invading the privacy of U.S. citizens, heaping compliance costs on businesses in the U.S. and discouraging foreign investment in this country.

"FATCA's harmful impacts cover the spectrum,” Paul said. “It is a violation of Americans' constitutional protections, oversteps the limits of Executive power, disregards the mutual respect of sovereignty among nations and drains money from the federal treasury under the guise of replenishing it, and discourages overseas investment in the United States."

"Tax evasion is a problem that should be addressed, but not in such an egregious way," Paul added.

House Republicans are locked in a debate over what they should demand from President Obama for hiking the debt ceiling.

Boehner says the Senate-approved bill would put a burden on small businesses.

The Speaker said he hasn't spoken with the Judiciary Committee chairman about the bill that passed the Senate.

Senior investors aren’t terribly confident that tax reform will get enacted this Congress, according to a new survey.

A third of the two dozen investors surveyed in the poll of Potomac Research Group clients, released Monday, said that a broad rewrite of the tax code would be done before 2014 ends. Half of the respondents did not expect a tax overhaul in the next 18 months.

The two tax-writing chairmen, Rep. Dave Camp (R-Mich.) at House Ways and Means, and Sen. Max Baucus (D-Mont.) at Senate Finance, are facing perhaps their final term at the helm.

Baucus is not seeking reelection and Camp is term-limited as chairman, meaning the two lawmakers could have extra incentive to finish off a tax revamp this Congress.

House Judiciary Committee Chairman Bob Goodlatte (R-Va.) criticized the Senate on Monday for moving so quickly on Internet sales tax legislation and said the House will take its time considering it.

The Senate approved the bill, the Marketplace Fairness Act, in a 69 to 27 vote on Monday.

“It is disappointing that the latest version of the Marketplace Fairness Act did not follow regular order in the Senate, but instead bypassed the Senate committee having the subject matter expertise," Goodlatte said in a statement. The Senate skipped over the Finance Committee, whose chairman, Max Baucus (D-Mont.), was skeptical of the bill. 

"Consideration in the House will be more thoughtful," Goodlatte said.

The 69-27 vote is a major victory for retail groups and state governments; bill faces tougher path in House.

Congressional tax writers just got a massive addition to their take-home reading.

The nonpartisan Joint Committee on Taxation (JCT) released a report, close to 570 pages in length, on Monday that summarizes current tax law and recent proposals to rewrite the system.

JCT crafted the report after the House Ways and Means Committee broke off into 11 separate working groups on tax reform. The nonpartisan panel’s analysis also included suggestions collected by the working groups – who worked on issues ranging from energy to financial services, and charitable groups to real estate.

Reps. Dave Camp (R-Mich.) and Sandy Levin (D-Mich.), the chairman and ranking member at Ways and Means, said that the panel “will dig into its details over the coming weeks.” Read more...

The Senate is poised to approve legislation that would allow states to collect a sales tax on goods sold online.