Finance Chairman Max Baucus has proposed to scrub the tax code to try to pave the way for an eventual broader attempt to overhaul the code. According to the Wall Street Journal, this is a bipartisan effort that includes both Houses of Congress.
The biggest issue on tap is putting a stop to annual refund fraud by restricting public access to a federal database of Social Security numbers of recent deaths. The proposed cleaning would also propose technical corrections that resulted in inadvertent loopholes by previous lawmakers. Sen. Baucus’s proposal would streamline reporting rules which would allow access to information taxpayers need to file their returns on time, saving taxpayers and the government costs of filing needless extensions.
The new bill would toughen tax-information reporting required by small businesses, as well as insurance companies, banks, and colleges and universities. It would also allow the IRS to levy federal payments to Medicare providers who are delinquent on their taxes and ask the State Department to revoke the passports of people who owe more than $50,000 in back taxes.
Though not a law yet, this could impact a very large amount of taxpayers in the near future. Especially since, it has bi-partisan support from several congressmen including, Mr. Baucus, Dave Camp, Bill Nelson, Mike Enzi, Tom Carper and Robert Casey. If it is signed into law, it could be the stepping stone Congress needs to update and codify the tax code for the first time since 1986. This is a grueling and time consuming process for Congress and with the current Congress in disarray over the Affordable Care act and another debt ceiling debacle coming in March or April, getting this completed is a long shot.
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