Lewis Applauds IRS Decision to Suspend Unfair Penalties on Small Businesses
Washington, DC— Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) today is applauding Internal Revenue Service (IRS) Commissioner Douglas H. Shulman for his decision to suspend collection of certain penalties which disproportionately impact small businesses, while Congress works on bipartisan, bicameral legislation to modify the law. The letter comes in response to a June 15, 2009 letter from bipartisan lawmakers of the Committee on Ways and Means and the Senate Finance Committee.
"I have heard from many taxpayers who are worried that the IRS would begin collection activities next week, and I am pleased that the IRS has halted collections," said Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA). "I know that the Commissioner shares my concern and the concern of the members of this Congress that these penalties were never intended to shut down small businesses and that legislation must be passed to address this problem. We have been working to ensure that legislation is introduced soon to remedy the disproportionate nature of this penalty, and we appreciate the Commissioner's consideration of our efforts."
Under current law, small businesses that invested in listed tax shelter transactions that generated modest tax benefits resulted in tax penalties significantly larger than the tax benefits received. Such disproportionate consequences were unexpected at the time the penalty was enacted. Congress expects to introduce legislation that would result in penalty amounts in better proportion to the tax benefits. While the penalty has helped the IRS end many abusive deals, the current penalty levels may be excessive in some circumstances.
The existing suspension is set to expire on September 30, 2009. Commissioner Shulman has agreed to suspend collection of these penalties until December 31, 2009, which will give the Congress additional time to remedy issues related to this penalty.
Click here to read the letter
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