Daily Deduction Fraud, Blacklists, and Prices
Renu Zaretsky
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On the Hill this week. The House Ways & Means Committee will mark up legislation on tax refund fraud and civil asset forfeiture this week. The Senate Finance Committee will hold a hearing on business tax reform tomorrow. TPC’s Eric Toder will be among the witnesses. On Wednesday, the House Small Business Committee will hold a hearing on employee-owned S corporations

A husband and wife pleaded guilty in the IRS “Get Transcript” breach. The couple played a role in the IRS data breach that compromised 700,000 taxpayer accounts. They were part of a team that used stolen taxpayer information to file fraudulent tax refunds that ended up in bank accounts controlled by the couple. Husband Anthony Alika pleaded guilty to conspiring to commit money laundering and wife Sonia pleaded guilty to illegally structuring cash withdrawals to evade bank reporting requirements. 

The Republican Study Committee released its tax reform recommendations. Among them: Abolish the IRS. “Tax collection and enforcement activities would be moved to a new, smaller, and more accountable department at the Treasury.” Would that smaller department be able to catch the likes of the Alikas?

A unified blacklist of Panama Papers’-type tax havens? Right now, each of the 28 EU states has their own list of tax havens, and each decides whether to impose restrictive measures on those nations. Now, EU states will try to agree on a new, shared list of nations that  could be sanctioned if they don’t change their ways. The EU hopes to complete the project by fall. Meanwhile The Wall Street Journal reports (paywall) that some EU finance ministers oppose an effort  to force multinationals to publish their tax liability and profits for every EU country in which they operate. They warn that the move could undermine efficiency and competitiveness. 

Global lenders urge governments to set a price on carbon. As the world’s leaders begin to sign the Paris agreement on climate change, the World Bank and the International Monetary Fund say that cutting emissions to prevent the worst effects of climate change isn’t possible unless all fossil fuel polluters pay for the carbon dioxide they emit. The World Bank’s Carbon Finance Unit is giving financial and technical assistance to countries that want to create cap-and-trade or carbon tax systems. The IMF is likewise consulting with interested nations, especially those struggling to raise revenue. 

As for a price on another sin… Democratic presidential hopeful Hillary Clinton supports Philadelphia’s soda tax, but Bernie Sanders opposes the levy, citing its regressive nature. He’d rather see another revenue source fund universal pre-Kindergarten.

And speaking of regressive taxes… Last month Florida’s Department of Revenue sent out a notice that fingerprinting services, including those provided digitally, are subject to the state’s 6 percent sales tax. Turns out, the levy would apply to gun sellers since anyone seeking a permit must submit their fingerprints as part of a criminal background check. One gun show operator wrote his state senator estimating he’d have to collect up to $100,000 a year in sales tax. A department spokesperson says the law has been on the books since 1992, and calls the notice merely a reminder. But gun advocates are not pleased. Said Republican State Senator Wilton Simpson, “It’s ridiculous. The right to bear arms was not created so that government could use it as just another method for taxation.”

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