Baucus, Grassley Applaud IRS Suspension of Certain Penalties on Small Businesses
Finance leaders pledge to fix undue penalty regime, expect continued IRS cooperation
Washington, DC — Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) commented today after receiving notice from the Internal Revenue Service (IRS) that the agency is suspending collection of certain penalties to allow Congress time to work on legislation that would help small businesses that inadvertently invested in listed tax shelters, resulting in tax penalty assessments much greater than the amount of tax benefits received from the transaction. Baucus and Grassley, along with Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) and Ranking Member Charles Boustany (R-LA), sent a letter to IRS Commissioner Douglas H. Shulman on June 12, 2009 requesting assistance while Congress works to address the issue.
“I’m pleased the IRS complied with our request so that Congress can do its part to ensure the tax code treats small businesses fairly. We are working – both sides of the aisle and the Capitol – to ensure assessed tax penalties fall in line with received tax benefits. Until we reach that goal, we require cooperation from the IRS so that millions of American small businesses don’t get another chip stacked against them in the lagging economy,” Baucus said. “Make no mistake, I will continue to go after tax cheats and tax shelter investments, but these are disproportionate and undue penalties on honest, hardworking American business owners and their employees. I appreciate the IRS’ help on this, and I will move this forward until the issue is resolved.”
“It’s good to have the reprieve from the IRS, though the suspension will probably need to be longer in order to get necessary changes through Congress,” Grassley said. “The IRS should also do the right thing by studying why only small businesses have been hit with the penalties since they’re less likely to have the expensive lawyers that big corporations do. It’s a matter of tax fairness for both the IRS and Congress.”
The original letter sent by lawmakers to IRS Commissioner Shulman is available on the Finance Committee website.
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