Rep. Hank Johnson Votes to Stop IRS Harassment of Taxpayers and Offshore Loopholes for Business

Press Release

Congressman Hank Johnson, a member of the House Small Business Committee, voted today to pass the Taxpayer Assistance and Simplification Act (H.R. 5719) to ensure a fairer, securer, and more simplified tax code. Johnson also supported The Fair Share Act (H.R. 5602) which closes offshore tax loopholes for federal contractors.

"Right here in America, taxpayers are being hounded by private collection agencies for unpaid taxes because the federal government allows it," said Rep. Johnson. "And the tax code requires an expertise in finance just to understand it."

According to the Congressman, the new bill will stop the practice of using private contractors to collect federal taxes and the harassment which the government has documented as a result. An estimated $50 million has been paid to private debt collectors and this practice has been linked to a significant rise in identity theft. Under bill provisions, when the IRS is engaged in tax fraud investigations the agency must notify a taxpayer that there may have been unauthorized use of the taxpayer's identity. The agency will also impose more stringent civil and criminal penalties against owners of fake IRS websites.

"In addition, we in Congress are taking a stand against the tax loopholes that contractors are using to avoid paying their fair share," Johnson said. "They are receiving millions in taxpayer dollars but are not paying Social Security and Medicare taxes as they should." It is estimated that defense contractor KBR Inc., for example, has benefited by almost $100 million a year through this offshore loophole.

The IRS is also urged to boost support for tax clinics and outreach so that more eligible taxpayers will take advantage of the Earned Income Tax Credit. Reports show that working Americans may have lost an estimated $8 billion in unclaimed earned income credits in 2004. The bill strengthens taxpayer protections from "predatory" providers of refund anticipation loans and permits the IRS to publicize unclaimed taxpayer refunds on its website.

Source