A House panel holds an impeachment hearing of IRS Commissioner John Koskinen, but the Senate won’t act. The hearing will feature testimony by GOP congressmen Jason Chaffetz and Tim DeSantis who will explain in surely great detail why members should vote for Koskinen’s removal. However, Senate Finance Committee Chair Orrin Hatch says the upper chamber will not remove Koskinen from his post, as his interactions with the Senate have failed to meet the standard for impeachment.
Also on the Hill this week. The House Ways & Means Oversight Subcommittee will have a second hearing Wednesday on small businesses and the IRS. Also Wednesday, the panel’s Tax Policy Subcommittee will examine current economic conditions driving the need for tax reform. The House Small Business Committee will hold its two-part series of hearings on tax issues facing the sharing economy.
The IRS doesn’t have the necessary authority to fix incorrect tax credits. A new report from the Treasury Inspector General for Tax Administration says that the agency needs “correctable error authority” to systematically address many inaccurate Earned Income Tax Credit claims. While the IRS has more time to verify EITC claims before it issues refunds, Congress did not expand IRS authority to correct claims when returns are processed. The IRS can audit claims after the fact, but that is more costly at a time when IRS resources remain scarce.
Oregon is set to vote on a corporate tax increase in November. Proponents secured 130,000 signatures to include Initiative Petition 28 on the fall ballot. IP 28 would amend state law to increase the annual minimum tax paid by C corporations with more than $25 million in sales. Right now they pay a minimum of $30,000, but IP 28 would boost the tax to $30,001 plus 2.5 percent of sales over $25 million. It could bring in $2.6 billion a year for Oregon’s education and health care programs. Public employee unions and education nonprofit organizations back the initiative, but the state’s business community plans to spend millions to defeat it.
Waco breaks its own record in tax breaks for Allergan. The pharmaceutical company—whose merger prospects with Pfizer recently sputtered after Treasury announced new anti-inversion rules—plans to expand an existing plant in the Texas city. And it’s in line for a bundle of local subsidies. The Waco City Council approved a unprecedented tax deal worth $13 million over 20 years for the $177.6 million plant expansion. McClellan County will consider adding another $8 million in tax breaks next month, and the Waco-McLennan County Economic Development Corporation is backing a $4 million cash contribution toward the expansion from the city-county incentive fund. The plant will double in size and could hire 250 more people. It currently has 750 employees at peak times.
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