A group of Senate Republicans expressed concern that an internal revenue service ( IRS ) compliance unit established under former president Joe Biden was being “motivated by ideological considerations” and may be “targeting” small businesses in the United States in a letter sent to the Trump administration on Tuesday.
Sens. Marsha Blackburn (R-Tenn. ) and Sen. Steve Daines (R-Mont. ) are featured in Tuesday’s letter. Senate Majority Whip John Barasso (R-Wyo. ), Sen. James Lankford (R-Okla. ), and contacted Deputy Treasury Secretary Michael Faulkender for clarifications regarding the IRS’s Big Business and International division’s pass-through compliance system.
The lawmakers wrote,” We are concerned that this action, established under the prior administration, appears to have been motivated by intellectual factors rather than the rules of good income management.”
The senators continued,” The establishment of a special police unit focusing on pass-through entities raises legitimate questions about whether the emphasis is on enhancing compliance or just focusing on specific business structures based on administrative prejudice.” No matter the size of the company, this kind of targeting is difficult, but it’s particularly difficult for smaller businesses with fewer resources to navigate like audits.
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The Republican senators reacted by saying the majority of small businesses in the country lack the resources to conduct” these extensive reviews” and that the reviews could result in “disproportionate compliance burdens” for them. The senators added that taxpayers earning under$ 400,000 were previously assured that they would” not face increased enforcement in relation to historical levels.”
The IRS pass-through compliance system highlighted in Tuesday’s notice was established during the Biden-Harris administration’s final month, according to The Daily Caller.
Previous IRS Commissioner Danny Werfel claimed that the conformity unit do “ensure the IRS holds the world’s wealthiest filers responsible for paying the full amount of what they owe” when the IRS unit was established in September of last year.
” We are honing-in on places where we think pass-throughs are higher on our list of concerns, and we think non-compliance among our wealthiest taxpayers has increased over the last ten years of IRS finances reduces,” Werfel said. This new unit will use funding from the Inflation Reduction Act to thwart efforts by some significant partnerships to consciously shield income through pass-throughs in order to avoid paying their taxes.
