Yesterday, the IRS Information Reporting Program Advisory Committee released its annual report which included a recommendation made by Democrats on the Ways and Means Committee to waive the penalty for under-withholding on taxes for individuals. Changes to deductions and exemptions made in the new Republican tax law have increased the risk of under-withholding. A June 4 press release from the IRS said they will waive certain penalties as they apply to multinational corporations, but no such offer was extended to small businesses or individual taxpayers. Following that announcement, Rep. Judy Chu (CA-27) led 12 other Democratic members of the Ways and Means Committee on a letter to then Acting IRS Commissioner David Kautter urging the IRS to give individuals and small businesses the same leniency, grace periods, and penalty waivers given to multinational corporations. Rep. Chu released the following statement:
“This hastily passed tax law has had two main effects so far: worsening inequality and creating confusion. Now, taxpayers could be subject to a penalty from a law they were never given the chance to understand. Seeing the problems created by this law, the IRS made exceptions to help the largest corporations avoid penalties, but left out individuals and small businesses. Tax reform that does not help working families is tax reform that does not help our country. That is why I led Democratic members of the Ways and Means Committee in writing to the IRS to at least give individuals the same leniency extended to multinational corporations. I’m glad to see the recommendation was adopted in the annual report, and I hope the IRS follows suit and implements this much-needed waiver.”
The letter is signed by Ways and Means Ranking Member Richard Neal (MA-01) and Representatives Sander M. Levin (MI-09), John Lewis (GA-05), Lloyd Doggett (TX-35), Mike Thompson (CA-05), John B. Larson (CT-01), Earl Blumenauer (OR-03), Bill Pascrell, Jr. (NJ-09), Danny K. Davis (IL-07), Linda T. Sanchez (CA-38), Brian Higgins (NY-26), and Terri A. Sewell (AL-07). And can be found online here.