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ProPublica reports that the 25 richest taxpayers in the United States have paid little or no income taxes despite billions of dollars in wealth gains, based on 15 years of confidential and individual tax data the publication is reported to have received.
“We’re going to learn about the ProPublica article,” IRS Commissioner Chuck Rettig said at a Senate Finance Committee hearing today on the agency’s budget.
Rettig said the IRS had “handed it over to the appropriate investigators, both external and internal,” and he is “absolutely” planning to prosecute.
However, he did not specify the extent of the apparent data breach.
The Senate’s chief financial officer, Ron Wyden (D-Ore), said the findings shed new light on the wealthy who aren’t paying their “fair share” and said he would issue a proposal to change that — an apparent reference to his plan to tax investment gains annually.
Privacy concerns were a top priority for GOP member, Senator Mike Crabow (R-Idaho). He described the tax leak as closely related to the Biden administration’s proposal to eliminate tax evasion by expanding access to the IRS beyond tax returns by requiring financial institutions to turn over bank account information for individuals and businesses to the agency.
“These are very important issues that require resolution,” Krabow said.
Wyden also expressed concern about the leak. He called it a “massive and unauthorized disclosure” from an “unclear” source, but said the IRS should determine this given the agency’s responsibility to protect taxpayer data.
ProPublica said it “does not know the identity of our source” and has not requested the information. The news organization also said it “considered the possibility that the information we received may have come from an actor hostile to American interests.”
Rettig said the IRS has historically been “very successful” in protecting the high volume of data it processes.
ProPublica reported effective lower taxes paid by Bezos, Buffett, and other high net worth Americans by comparing their tax returns with their wealth gains reported by Forbes.
The leak comes at a good time for Democrats who are pressing to raise taxes on the rich.
Lawmakers are internally divided over whether and how much they should increase to fund their next big-spending initiative. Negotiations with Republicans over the bipartisan package appear to be making little progress.
If the Democrats decide to go it alone, as many expect, tax-raising questions will be right before the party convention — which will have no room for error in both the House and Senate.
To that extent, the ProPublica report, in all its detail, will help progressives in the party by making it more difficult for more moderate members to oppose tax increases.
It is extremely rare for private tax information to leak.
Returns have strict privacy protections – disclosing details about people’s taxes is a crime punishable by up to five years in prison.
However, the information provided to ProPublica comes on the heels of another high-profile leak last year, of President Donald Trump’s long-hidden tax returns to the New York Times.
Former IRS Commissioner John Koskinen said he finds it hard to believe that someone at the IRS was responsible.
“It will be difficult for an employee to cover their tracks because of this much information,” said Koskinen, who was Rettig’s direct predecessor.
Any time an agency employee looks at a single return, he said, that action is monitored and recorded, which every IRS employee knows. In addition, an IRS employee can be fired simply for consideration of a tax return who was not authorized to work through an individual audit or specific review, Koskinen said.
He said he wouldn’t be surprised to learn that the material is sourced elsewhere than the IRS, considering current hacks and ransomware, for example.
Brian Faller contributed to this report.
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