IRS modernization bill approved by Senate panel
The Senate Finance Committee advanced a bipartisan tax administration package Thursday aimed at modernizing the IRS, improving customer service and strengthening taxpayer rights.
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The committee voted, 26-1, to approve the sprawling tax modernization bill, which encompasses a laundry list of tax provisions including some proposals that have already gotten backing from either House tax writers or that chamber as a whole. Sen. Elizabeth Warren, D-Mass., was the lone dissenter.
“This bipartisan bill modernizes and streamlines IRS operations, strengthens taxpayer rights, and delivers a more taxpayer-first system,” Senate Finance Chairman Michael D. Crapo, R-Idaho, said in his opening remarks. “It reflects years of bipartisan efforts to translate stories of casework frustrations and tangible fixes designed to make the IRS work more efficiently for the American people.”
The bill could be one of the 119th Congress’s last tax measures, beyond the typical year-end extensions of tax breaks or partisan tax legislation that could become part of another GOP reconciliation package.
The bill includes a lengthy list of customer-service initiatives focused on modernizing the IRS, including those included in a House-passed tax administration bill. Another bill that advanced out of the House Ways and Means Committee and is also in the package is focused on easing the tax burden for U.S. nationals who have been held hostage abroad.
It also includes provisions aimed at the judicial review process, tax policy changes for American citizens living abroad and oversight of taxpayer preparers, among other proposals.
Sen. Ron Wyden, top Democrat on the committee, said in his opening remarks that the committee is taking “big steps to make some history in the area of tax policy and get us on the road to wringing out some of the inefficiency in the tax code.”
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The committee shot down a handful of amendments, including one from Democrats on the panel intended to block the controversial settlement of President Donald Trump’s lawsuit against the IRS.
Trump sued the IRS for mishandling his personal tax data, and the settlement would create a $1.8 billion “anti-weaponization” fund and provide tax audit immunity to Trump and his family. The amendment, which was defeated on a party-line vote of 13-14, would have barred the IRS and Treasury Department from entering into any agreement that would impact federal tax matters involving the president, first family and related entities.
Wyden said the amendment would “rein in this lawlessness” by Trump, while defeating it would amount to “an endorsement of an obscene and illegal self-dealing by the president of the United States.”
The amendment came as two key GOP members of the Senate Judiciary Committee — Sens. Thom Tillis of North Carolina and Bill Cassidy of Louisiana — are holding up the confirmation process for Trump’s pick to be attorney general, Todd Blanche, over concerns about the tax settlement.
Tillis, who also sits on the Finance Committee, opposed the amendment when it was offered, saying that he believes he is “working in good faith” with Blanche to get the situation resolved and advance the nomination.
“I had been one who had worked with Blanche to try and get language that we could put through [by unanimous consent] on the floor if we needed to,” Tillis said. “But now I’m convinced that the best way to do this is to end it by renegotiating the agreement and settling it for good.”
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