MapLight, a nonpartisan research organization that tracks money's influence on politics, has released a new analysis of how major tax and accounting organizations are spending funds on lobbying Congress and federal agencies.
The group contends that the lobbying is helping prevent Congress from passing a proposal to implement a return-free filing system, in which the IRS would provide taxpayers with a filled-out form containing all of their information and estimate their taxes. Former IRS commissioner Doug Shulman had pushed the idea of such a “real-time tax system” during his tenure, but the IRS’s archaic technology and a series of budget cuts over the past five years have combined to prevent the agency from developing such a system.
However, MapLight pointed out that the tax authorities in several other industrialized countries such as Denmark and Spain have developed such technology, and argues that such a system is being held back by lobbying efforts.
For whatever purpose the lobbying money is being spent, MapLight’s analysis helps show which accounting and technology companies and organizations are spending heavily and which politicians are the biggest beneficiaries.
MapLight looked at contributions from H&R Block, Jackson Hewitt, Intuit, the American Institute of CPAs and the National Society of Accountants. It found that since 2011, the five companies and organizations have spent a total of $35 million lobbying Congress and federal agencies. To search MapLight's Lobbying Spending Database, click here.
MapLight also analyzed the 2013 personal financial disclosures of members of Congress to determine which members own stock in Intuit, H&R Block and Jackson Hewitt. Eight members of Congress reported owning between $57,249 and $219,242 worth of stock combined in the three companies. Seven members of Congress reported owning between $57,249 and $218,242 worth of stock combined in Intuit. To search MapLight's Personal Financial Disclosure Database, click here.
Additionally, MapLight analyzed campaign contributions from the political action committees of tax preparation companies and trade associations representing public accountants including H&R Block, Intuit, the National Society of Accountants and the American Institute of CPAs to all congressional candidates between January 1, 2009, and December 31, 2014.
Congressman Jim Cooper, D-Tenn., introduced a bill in 2011 that would have streamlined tax returns for most individuals. The so-called "return-free" filing bill never even came up for a vote in the House Ways and Means Committee, which has jurisdiction over the IRS. Sen. Ron Wyden, D-Ore., and Sen. Dan Coats, R-Ind., included the proposal in their failed 2011 tax reform bill. Cooper's office said congressional inaction was due, in part, to opposition from tax preparation companies like Intuit and H&R Block.
The average member of the House Ways and Means Committee received, on average, 2.8 times more money ($7,072) from the tax preparation industry compared to the average member of the House of Representatives ($2,509) during the 2014 election cycle. Since Rep. Cooper's 2011 bill to streamline individual tax returns died, the industry has increased its campaign contributions, and Congress has not considered any other return-free filing proposals.
Since 2011, the tax preparation industry has contributed nearly $2.6 million to congressional candidates. During the 2014 election cycle, seven of the top 10 recipients of campaign contributions from the tax prep industry were either in congressional leadership or served on the committees that oversee the IRS.
The top recipient of tax preparation funds, Sen. Pat Roberts, R-Kan., is a senior member of the Senate Finance Committee and received $18,999 from the tax preparation industry during the 2014 election cycle. As the chairman of the Senate Agriculture Committee, Sen. Roberts also oversees the Commodity Futures Trading Commission, which in October 2014 issued a proposed new code of conduct for accountants.
The chairman of the House Ways and Means Committee, Rep. Paul Ryan, R-Wis., was the third highest recipient of funds from the tax preparation industry, receiving $16,100 during the 2014 election cycle.
The average member of the Senate Finance Committee received, on average, 1.5 times more money ($10,818) from the tax preparation industry compared to the average senator ($6,905) during the last six years.
Congress has failed to consider any other return-free filing proposals since Rep. Cooper's bill died, MapLight pointed out. Instead, members have introduced bills to prevent return-free filing from spreading. Rep. Zoe Lofgren, D-Calif., and Rep. Eric Cantor, R-Va., introduced a bill in 2007 to limit the proposal. The bill died, and Rep. Cantor eventually left Congress. But Rep. Lofgren has continued to receive campaign contributions from the tax preparation industry including from Intuit, whose Mountain View, Calif., headquarters are not far from Rep. Lofgren's San Jose-based district. During the 2014 election cycle, Intuit was Rep. Lofgren's third highest campaign contributor, MapLight noted.
Since failing to consider return-free filing, Congress has focused its attention on regulating fraudulent paid tax preparers, which the industry largely supports. In 2010, the IRS announced a plan to require paid tax preparers to receive certification before being allowed to charge a fee for filling out tax returns. Intuit and H&R Block supported the program. In February 2014, though, a federal appeals court struck down the IRS program, concluding the agency did not have the authority to regulate paid tax preparers.
Earlier this year, Sen. Wyden and Rep. Steve Cohen, D-Tenn., introduced billls that would authorize the IRS to certify paid tax preparers. Several states, including Oregon and California, already subject paid preparers to such a process. In 2012, 82 million Americans paid a professional to prepare their taxes. H&R Block is a strong supporter of this type of legislation, and even testified in support of a similar bill last year.
The complete report can be found here.
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