Dems concerned Trump officials may pressure IRS on withholdings

Dems concerned Trump officials may pressure IRS on withholdings
© Greg Nash

The top Democrats on Congress's tax-writing committees are concerned the Trump administration may pressure the IRS to produce withholding tables that would benefit Republicans politically but ultimately cause people to owe taxes next year.

In a letter to acting IRS Commissioner David Kautter on Monday, Sen. Ron WydenRonald (Ron) Lee WydenOvernight Health Care — Presented by Johnson & Johnson – House progressives may try to block vote on Pelosi drug bill | McConnell, Grassley at odds over Trump-backed drug pricing bill | Lawmakers close to deal on surprise medical bills Congressional leaders unite to fight for better future for America's children and families McConnell, Grassley at odds over Trump-backed drug bill MORE (D-Ore.) and Rep. Richard NealRichard Edmund NealOvernight Health Care: House to vote next week on drug prices bill | Conway says Trump trying to find 'balance' on youth vaping | US spent trillion on hospitals in 2018 Democrats could introduce articles of impeachment next week House to vote next week on sweeping bill to lower drug prices MORE (D-Mass.) said they are worried that the Treasury Department "may unduly influence the new withholding tables for the 2018 tax year in a manner that will result in millions of taxpayers receiving larger after-tax paychecks this election year but ultimately owing federal income tax when they file in 2019."

The IRS is expected to release guidance this month on tax withholdings from employee's paychecks that reflect the new tax law President TrumpDonald John TrumpLawmakers prep ahead of impeachment hearing Democrats gear up for high-stakes Judiciary hearing Warren says she made almost M from legal work over past three decades MORE signed last month.

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Republicans have said that the new tax-cut law will become more popular with the public once withholding tables are adjusted and people see greater take-home pay. GOP lawmakers and administration officials are hoping that the tax cuts will give Republicans a boost in November's midterm elections.

Wyden and Neal said they don't want Treasury to push the IRS to release withholding tables that take out an insufficient amount of taxes. In addition to serving as acting IRS commissioner, Kautter is the assistant secretary for tax policy at Treasury.

If taxes are not sufficiently withheld, people may get the appearance this year that they received a large tax cut, but will have to pay money to the IRS next year, the lawmakers said.

"For many families, IRS tables that withhold too little in taxes during the year present a considerable problem and undue hardship," Wyden and Neal wrote.

Neal and Wyden asked the IRS to provide them with information by Jan. 12 about Treasury Department officials' review of the forthcoming withholding tables.

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The Democrats also sent a letter to the Government Accountability Office, asking that agency to review the withholding tables to ensure they are adequate.

House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyLawmakers under pressure to pass benefits fix for military families How centrist Dems learned to stop worrying and love impeachment On The Money: Senate passes first spending package as shutdown looms | Treasury moves to roll back Obama rules on offshore tax deals | Trade deal talks manage to weather Trump impeachment storm MORE (R-Texas) said he was confident that the IRS would produce timely, accurate withholding tables.

"I think the bottom line here is Democrats so object to Americans keeping more of what they earn at work, they'll do and say just about anything to cast doubt on it," he told reporters Monday.

— updated at 4:28 p.m.