A group of senators recently released a letter to the Internal Revenue Service (IRS) calling on the agency to adjust its practices and conduct more efficient audits. The Senators behind the letter include U.S. Senator Dick Durbine (D-IL), Elizabeth Warren (D-MA) and Bernie Sanders (I-VT).
Details of the letter: Senators claim IRS disproportionately audits the poor
The senators call on the IRS to review their audit process. They state it has a disproportionate impact on the poor due to the agency’s focus on audits of tax returns that claim an earned income tax credit. This tax credit is, they note, one of the government’s antipoverty programs. The senators contend that the agency’s target of those who take this credit leads to a focus on the poorest segment of our population.
Support for findings: Senators point to recent federal investigations
In addition to a focus on the working class, the letter state the IRS has failed to find those in the more affluent portion of our country who are committing tax crimes. The Senators point to recent investigations of high level federal officials to highlight the agency’s weakness. It states these investigations have brought attention to the fact that many continue to successfully hide assets from tax obligations through the use of foreign accounts.
Call to action: Senators call for IRS to shift focus to tax crimes
Although the Senators acknowledge the agency’s recent budget cuts have resulted in a decreased staff to pursue these matters, it calls on the agency to shift its focus away from working class Americans and focus instead on money laundering and other tax fraud crimes.
The letter is a reminder for taxpayers that hold accounts oversees to make sure they are in full compliance with tax obligations. A failure to do so can result in steep financial penalties and potential imprisonment. It is wise to contact an attorney experienced in this niche area of tax law if you are not sure your accounts are in compliance. Your attorney can review your accounts and discuss various options for compliance.