Last month I wrote to various members of the House and Senate, including my own representative and senators, regarding a Federal Tax Amnesty Program, similar to the ones that have been so successful in the states. (See my post “Tax Amnesty”).
On Wednesday of this week I received a response from Congressman Albio Sires –
“Thank you for contacting me with your proposal for a federal tax amnesty. I appreciate hearing your views on this issue.
As you point out, Federation of Tax Administrators statistics suggest that through tax amnesty, individual states have sometimes collected hundreds of millions of dollars in a matter of months. One could therefore presume that a temporary nationwide amnesty would, in the immediate term, yield revenue on a far greater scale. Nevertheless, the Congressional Joint Committee on Taxation has expressed reservations about the prospect of an amnesty. The Committee released a report in a previous Congress concluding that amnesty would ultimately hinder tax collection and reduce net revenue. The reasoning is that individuals would become less likely to pay their taxes in future years, perhaps in expectation that the government would once again write off interest and penalty fees.
Please know that I share your concern for the financial well-being of out nation’s workers and your interest in ensuring that the Internal Revenue Service operates as fairly and efficiently as possible. Be assured that I will keep your suggestions in mind should this issue come before the full House of Representatives for a vote.”
The concerns expressed by the JCOT regarding reduced payment in anticipation of a future amnesty have not proven to be a problem with the various state programs.
The IRS collection activity would not cease or slack off once the initial program has completed in anticipation of future amnesties. If anything the Service should be more aggressive in its collection efforts after the amnesty period ends (although not by using outside collection agencies).
Besides, as I stated in my letter -
“The legislation creating the Federal Tax Amnesty Program would state that the federal government would not be able to institute another Amnesty for at least ten (10) years after the end of the current amnesty period.”
Perhaps this period of prohibition should be longer – 15 or 20 years.
And finally, amnesty is aimed less at tax cheats and more at honest Americans who have been so overwhelmed by the accrual of interest and penalties that they walk away from their tax debt altogether. It is a variation on the current Offer In Compromise program.
Federal tax amnesty would also motivate non-filers if increased penalties for not taking advantage of the amnesty and more aggressive IRS activity in identifying non-filers were included in the legislation.
You can see a copy of the letter, which you can also adopt to send to your representatives, here.
I must point out that of all the elected officials in Washington to whom I have written in recent years, in both houses and on both sides, Congressman Sires is the only one who has sent me a personal and responsive reply. The only other time I got any other kind of reply was when I wrote to “W” during his first term with a tax proposal and received a general pro-forma letter of “thanks for your input – we appreciate hearing from the public” from a lower-level flunky. Thanks to the Congressman for being responsive to his constituents.
BTW – Still working away on the GD extensions!
TTFN
{Some people are addicted to drugs, some to alcohol, others to sex. It seems I am somewhat addicted to blogging – I just can’t stop “cold turkey”, even for only a week – except, of course, during the tax season. Oh well. Now if only I could make some money from it! - TWTP}
On Wednesday of this week I received a response from Congressman Albio Sires –
“Thank you for contacting me with your proposal for a federal tax amnesty. I appreciate hearing your views on this issue.
As you point out, Federation of Tax Administrators statistics suggest that through tax amnesty, individual states have sometimes collected hundreds of millions of dollars in a matter of months. One could therefore presume that a temporary nationwide amnesty would, in the immediate term, yield revenue on a far greater scale. Nevertheless, the Congressional Joint Committee on Taxation has expressed reservations about the prospect of an amnesty. The Committee released a report in a previous Congress concluding that amnesty would ultimately hinder tax collection and reduce net revenue. The reasoning is that individuals would become less likely to pay their taxes in future years, perhaps in expectation that the government would once again write off interest and penalty fees.
Please know that I share your concern for the financial well-being of out nation’s workers and your interest in ensuring that the Internal Revenue Service operates as fairly and efficiently as possible. Be assured that I will keep your suggestions in mind should this issue come before the full House of Representatives for a vote.”
The concerns expressed by the JCOT regarding reduced payment in anticipation of a future amnesty have not proven to be a problem with the various state programs.
The IRS collection activity would not cease or slack off once the initial program has completed in anticipation of future amnesties. If anything the Service should be more aggressive in its collection efforts after the amnesty period ends (although not by using outside collection agencies).
Besides, as I stated in my letter -
“The legislation creating the Federal Tax Amnesty Program would state that the federal government would not be able to institute another Amnesty for at least ten (10) years after the end of the current amnesty period.”
Perhaps this period of prohibition should be longer – 15 or 20 years.
And finally, amnesty is aimed less at tax cheats and more at honest Americans who have been so overwhelmed by the accrual of interest and penalties that they walk away from their tax debt altogether. It is a variation on the current Offer In Compromise program.
Federal tax amnesty would also motivate non-filers if increased penalties for not taking advantage of the amnesty and more aggressive IRS activity in identifying non-filers were included in the legislation.
You can see a copy of the letter, which you can also adopt to send to your representatives, here.
I must point out that of all the elected officials in Washington to whom I have written in recent years, in both houses and on both sides, Congressman Sires is the only one who has sent me a personal and responsive reply. The only other time I got any other kind of reply was when I wrote to “W” during his first term with a tax proposal and received a general pro-forma letter of “thanks for your input – we appreciate hearing from the public” from a lower-level flunky. Thanks to the Congressman for being responsive to his constituents.
BTW – Still working away on the GD extensions!
TTFN
{Some people are addicted to drugs, some to alcohol, others to sex. It seems I am somewhat addicted to blogging – I just can’t stop “cold turkey”, even for only a week – except, of course, during the tax season. Oh well. Now if only I could make some money from it! - TWTP}
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