Rep. Joe Donnelly, D-Ind., has introduced a bill to lessen the heavy penalties imposed by the Internal Revenue Service on taxpayers who use so-called listed tax shelter transactions.
The bill would cut the automatic penalties of $100,000 on individuals and $200,000 on businesses who are found by the IRS to have engaged in such transactions. Instead, Donnellys bill would link the penalty amounts to the actual understatement of tax liability, reducing the penalty to 40 percent.
The penalties associated with violating this one section are completely disproportionate to the violations, which, in many cases, taxpayers do not even know they have committed, said Donnelly in a statement quoted by Dow Jones Newswires.
A similar bill was introduced earlier this month in the Senate by Evan Bayh, D-Ind.; Richard Lugar, R-Ind.; and Ben Nelson, D-Neb. Donnelly told Dow Jones he hopes to get his bill attached to broader tax legislation by the House Ways and Means Committee. IRS officials told Donnelly that they may put enforcement actions on hold while the bills are pending in the House and Senate.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access