Grassley's 'Pimp Tax' Moves Out of Committee

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The Senate Finance Committee approved legislation that would empower the Internal Revenue Service to hit sex traffickers with major fines and lengthy prison sentences for failing to file employment paperwork and withhold taxes for the women and girls under their command.

Sen. Charles Grassley, R-Iowa, and chairman of the tax-writing Senate committee brought the proposal forward. "It's a no-brainer to have the IRS go after sex traffickers," he said, in a statement. "Prosecuting tax code violations can get these guys off the street and yank from their grasp the girls and women they exploit."

In the past, the IRS has been saddled by having to focus on proving how much income a sexual trafficker or pimp earns in order to show that the trafficker has not been paying enough income tax. Grassley's bill would make certain tax crimes a felony when the money comes from criminal activity. A one-year prison sentence and $25,000 fine would become a 10-year sentence and $50,000 fine for each employment form that a pimp or sex trafficker fails to file.

The change could have the added benefit of making it easier to put pimps out of business without requiring women to testify to abuse and mistreatment.

Grassley's proposal also authorizes $2 million toward the establishment of an office in the IRS criminal investigation division to prosecute unlawful sex traffickers for violations of tax laws and the commission of financial crimes.

The bill also includes side measures that would repeal the telephone tax and address some administrative matters that apply to IRS taxpayer services.

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