Billionaires’ tax data leak sparks GOP outcry over privacy – The North State Journal

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Senator Mike Crapo, R-Idaho, speaks during a Senate Finance Committee hearing on the IRS budget request at Capitol Hill in Washington on Tuesday, June 8, 2021 (Tom Williams / Pool via AP )

WASHINGTON, DC – Republicans in Congress are alarmed by the leak of confidential IRS data to investigative news agency ProPublica, allowing it to reveal famous billionaires like Warren Buffett, Bill Gates and Mark Zuckerberg were paying sometimes little income tax in the United States. A senior IRS official said Thursday that a federal criminal investigation into the leak was requested.

Taking a detour through the debate over President Joe Biden’s tax review plan, GOP lawmakers demand to know how private tax data was disclosed and they are lobbying the Treasury Department and IRS to prosecute anyone who violated the law.

“Taxpayers must have the utmost confidence in government institutions that house their personal and confidential information,” a group of Republican senators said in letters demanding an investigation. “Unfortunately, it appears that personnel with access to Americans’ personal and confidential information are misusing protected information for political reasons. The Treasury and IRS must hold accountable anyone who broke federal law by inappropriately sharing the confidential tax information and tax returns of multiple Americans. “

Douglas O’Donnell, an IRS deputy commissioner, said in a hearing before a House panel that the Treasury Department, which oversees the IRS, referred the case to the FBI and the bureau for investigation. of the District of Columbia’s United States Attorney General.

Access to confidential tax data and its disclosure are problems, O’Donnell said. “We too want to know what happened urgently.”

The law provides for potential criminal penalties for federal employees or others who disclose tax information.

The ProPublica report released Tuesday on America’s Richest People was based on IRS data – long considered sacrosanct – provided by an anonymous source.

For Democrats, the revelations confirmed their long-standing accusations that the IRS is giving a free pass to large corporations and wealthy individuals while hunting down low-income people. Democrats have presented the new report as a centerpiece in the national dialogue on the vast and growing inequality between the rich and everyone.

Senator Elizabeth Warren, D-Mass., Said in a tweet: “Our tax system is rigged for billionaires who don’t make their fortunes with their income, as working families do. The proof is very clear: it’s time for a #WealthTax in America to finally make the ultra-rich pay their fair share.

The report showed that Amazon founder Jeff Bezos paid no income tax in 2007 and 2011. Tesla founder Elon Musk’s income tax bill was zero in 2018. The financier George Soros has spent three consecutive years without paying federal income tax. Overall, the richest 25 Americans pay less tax – on average 15.8% of adjusted gross income – than many ordinary workers, once taxes for Social Security and Medicare are rolled back. included, according to ProPublica.

They all used perfectly legal tax strategies, which is why the ProPublica report fueled the debate about the loopholes, shelters and offshore havens available to rich and giant corporations thanks to the federal tax code.

The report became part of the debate over Biden’s sweeping tax plan, which must be approved by Congress. In search of income to fund his multibillion-dollar plan to boost infrastructure, families, education and skills training, Biden targets the wealthy for higher taxes. He wants to raise the top tax rate to 39.6% for people earning $ 400,000 a year or more in taxable income, estimated at less than 2% of US households. The highest tax rate that workers pay on wages and salaries is currently 37%.

Biden is proposing to almost double the tax rate that high-income Americans pay on profits from stocks and other investments. Inherited capital gains would no longer be exempt from tax. The plan would also increase corporate taxes, affecting high net worth investors who own shares of companies.

As they sound the alarm bells over tax data privacy, Republicans are also denouncing what they see as a related intrusion: a new financial report proposal that’s tucked away in Biden’s tax plan. Aimed at helping the IRS collect taxes, it would require U.S. banks to report most in-and-out flows from personal and business accounts to the agency, including bank loans and investment accounts. The banks aren’t crazy either.

The goal is to give the IRS a better view of the income underreported by individuals and businesses, according to the architects of the plan. The income of the wealthiest taxpayers from investments and business activities would be reported to the IRS in the same manner as wages and salaries.

Republican lawmakers see it as an invasion of taxpayer privacy.

The requirement would result in “a drastic increase in the amount of private and sensitive information reported to the IRS by financial institutions about deposits or withdrawals made by any individual or business from savings, checking or business accounts. other accounts as low as $ 600, “Republicans senior in tax policy, Senator Mike Crapo of Idaho and Representative Kevin Brady of Texas, IRS Commissioner Charles Rettig said in a letter. “Taxpayers who are already concerned that their local banks will become IRS monitoring and reporting agents should now also consider whether the data collected and reported to the agency is secure.”

A range of business groups representing large and small banks and credit unions opposed the proposal, saying their members already provide “important data” to the IRS and other regulators. The proposal “would impose costs and complexity that are not justified by the potential and highly uncertain benefits,” the groups said in a recent statement to a Senate panel.



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