Business & Economy

Overnight Finance: IRS hiring hundreds of new tax enforcers

IRS BEEFS UP: The Internal Revenue Service is going to hire between 600 and 700 new employees focused on tax enforcement, the agency’s head announced Tuesday.

The addition will be the agency’s first significant enforcement hiring in more than five years, IRS Commissioner John Koskinen said in a message to agency employees.

{mosads}”This is a good development for our tax system,” Koskinen said. “When you look at the IRS overall, every dollar invested in us returns at least $4 to the Treasury. The numbers are even higher when it involves enforcement. Each enforcement position typically returns almost $10 to the U.S. Treasury for every dollar spent — and in many instances, much more.”

The Hill’s Naomi Jagoda explains why IRS needed to bolster its ranks:

PELOSI’S PUERTO RICO DILEMMA: House Minority Leader Nancy Pelosi is holding her fire on Republicans when it comes to Puerto Rico.

The Democratic leader aimed piercing criticism at Republicans on Friday for inaction on a host of issues as varied as the Zika crisis and the national budget: “Do your job,” she implored.

Pelosi then adopted an entirely different tone regarding Puerto Rico’s debt crisis, going out of her way to praise Speaker Paul Ryan’s (R-Wis.) efforts as genuine.

“I think they’re operating in good faith,” she said.

The shifting tones highlighted the California Democrat’s dual election-year roles.

As the opposition leader crusading to win back the House, Pelosi wants to do nothing to undercut the Democrats’ most trenchant campaign argument: that the Republicans are simply too dysfunctional to govern the country effectively. She’s determined to prevent Ryan and Republicans from winning any major legislative victories.

At the same time, Pelosi the legislative negotiator is signaling a willingness to work with Ryan on Puerto Rico to ensure a measure gets to President Obama’s desk. The Hill’s Mike Lillis and Peter Schroeder take us for a trip along the tightrope:

FRUSTRATION WITH INDIA MOUNTS: Business groups are expressing growing frustration about India’s lack of progress toward removing trade and economic barriers and opening the country’s markets to U.S. exports.

The National Association of Manufacturers (NAM) and U.S. Chamber of Commerce are among the groups calling on India Prime Minister Narendra Modi to make concrete policy changes, including lowering tariffs and ramping up intellectual property rights protections, ahead of his trip to the United States next month.

Linda Dempsey, vice president of international economic affairs for NAM, said that while discussions between India and the United States have resumed since Modi took office two years ago have been largely positive, his efforts to deliver on promises to remove long-standing trade barriers have fallen far short.

“India’s actions have not kept pace at all with the rhetoric,” Dempsey said. The Hill’s Vicki Needham explains why:

EPIC BATTLE FOR THE COMMERCE COMMITTEE GAVEL: Ask outgoing House GOP campaign chief Greg Walden about his next move, and he’ll insist he’s not looking past the November elections.

But with no obvious path to move up the leadership ladder, the Oregon Republican made clear to The Hill that he’s seriously considering a bid this fall to succeed Rep. Fred Upton (R-Mich.) as chairman of the powerful Energy and Commerce Committee.

Such a move would pit Walden against a good friend and well-connected colleague, Rep. John Shimkus (R-Ill.), who carries more seniority on the panel and has already signaled he’s running for the gavel.

“It’s a King Kong vs. Godzilla kind of race,” said one senior member of the House GOP Steering Committee, which will pick the next chairman. “Both are very credible candidates for the job. Both smart. Both leaders. Both have great relationships. And both are strong supporters of the team.” The Hill’s Scott Wong takes us to the ring:

HAPPY TUESDAY and welcome to Overnight Finance, where we’re giving a shout-out to every educator on Teacher Appreciation Day. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight’s highlights include a trade push from President Obama, an IRS hiring spree and a drug cartel crackdown.

See something I missed? Let me know at or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here:

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OBAMA HITS WAPO WITH PUSH FOR TPP: President Obama on Monday said Congress needs to pass a sweeping Pacific Rim trade agreement to ensure the United States takes the reins of global trade in the region instead of China.

The Obama administration is working closely with lawmakers on Capitol Hill to build support for the 12-nation Trans-Pacific Partnership (TPP), arguing that delaying votes on the deal will make it harder to pass the agreement, the president said in a Washington Post op-ed.

“The world has changed. The rules are changing with it,” Obama said.

“The United States, not countries like China, should write them. Let’s seize this opportunity, pass the Trans-Pacific Partnership and make sure America isn’t holding the bag, but holding the pen.” Vicki Needham has the president’s pitch:

TREASURY SANCTIONS COLOMBIAN DRUG CARTEL: The Treasury Department on Tuesday targeted seven people and 11 businesses connected to Colombian drug cartel, freezing their assets.

Tuesday’s action from Treasury’s Office of Foreign Assets Control (OFAC) focused on La Oficina de Envigado, a Colombian organization allegedly involved in narcotics trafficking, money laundering, extortion and murder for hire, according to OFAC.

The agency labeled Colombian national Jose Bayron Piedrahita Ceballos and several family members and associates as “specifically designated narcotics traffickers,” which could lead to millions of dollars in fines and years in prison:

DEM SENATORS: SLASH EXECUTIVE PAY AT DOWNSIZING PENSIONS: A group of Democratic senators want to see pension executives suffer a pay cut if the plans they monitor cut benefits.

A new bill unveiled Tuesday takes square aim at executives of pension plans that are considering cutting benefits, as lawmakers want to ensure that top officials feel some of the resulting pain as well.

The bill comes at the same time the Treasury Department is nearing a deadline to decide whether to sign off on a sweeping set of benefit cuts sought by the Central States Pension Fund, which provides benefits to hundreds of thousands of union workers.

The bill, sponsored by five Democratic senators, is directly spurred by trouble at that fund, which is seeking cuts not only for future retirees but existing ones. Some people under the plan are facing benefit cuts of as much as 60 percent. Peter Schroeder walks us through the bill:

CONGRATS, IRS!: The Internal Revenue Service correctly determined the allowable amount of the ObamaCare-related premium tax credit on most tax returns last year, a report made public Tuesday found.

The tax credit, created by the Affordable Care Act, is designed to help offset the costs of health insurance for low- and moderate-income people. People can receive their credit in advance or claim it on their tax return. If taxpayers receive the credit in advance, they have to reconcile the amount they received with the amount they are allowed on their tax return.

The Treasury Inspector General for Tax Administration (TIGTA) analyzed more than 2.6 million tax returns filed from January to May 2015 that claimed the credit. The watchdog said in its report that it determined that the IRS accurately calculated the allowable credit on 93 percent of the returns.

But that still meant there were nearly 183,000 returns where there were differences between the calculations between the TIGTA and the IRS:

SMALL BIZ WORRIED ABOUT FEDERAL REGS: A majority of small retailers say they are overwhelmed by federal regulations, according to a new survey.

The National Retail Federation said Tuesday that 69 percent of respondents said that government regulations, including labor and healthcare mandates, are hampering their ability to hire workers and boost the nation’s economic growth.

“To fulfill their role in driving the American economy, small businesses need the freedom to make the decisions that make sense for them instead of being burdened by one-size-fits all mandates,” said NRF President and CEO Matthew Shay.

Shay urged congressional lawmakers and presidential candidates to take a hard look at the nation’s expanding regulatory framework:

HOUSING GROUPS POINT TO FREDDIE MAC IN PUSH FOR FINANCE REFORM: Housing industry and mortgage advocates say Freddie Mac’s $354 million first-quarter net loss should sound an alarm on Capitol Hill that there is an urgent need to overhaul the nation’s housing finance system.

Government-controlled Freddie, which reported strong business during the January-March quarter, won’t pay the Treasury Department a quarterly dividend after recording the shortfall.

Ed Brady, chairman of the National Association of Home Builders and a homebuilder from Bloomington, Ill., said that “taxpayers dodged a bullet today, but the warning bell is blaring.”

“Today’s earnings report should serve as an urgently needed wake-up call to policymakers,” Brady said. Vicki Needham tells us why:

NIGHTCAP: Four crying babies = free JetBlue tickets.

Write us with tips, suggestions and news:,;, and Follow us on Twitter: @SylvanLane,  @VickofTheHill; @PeteSchroeder; and @NJagoda.

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