Proposed tougher tax enforcement rules will not be introduced to fund a $1.2 trillion infrastructure bill, a Republican from Ohio said.
Sen. Rob Portman confirmed a major Internal Revenue Service (IRS) revenue-raising measure will not be adopted to pay for the bipartisan bill.
Portman revealed his GOP colleagues do not like involving the IRS because it has increasing come under scrutiny from conservatives in recent years.
Republicans have separately questioned a $3.5 trillion infrastructure package that Democrats will move through the Senate under special budget rules, without Republican support. This bill, as Portman said, will already include a “lot more IRS enforcement.”
“That created quite a problem because the general agreement is that this is the bipartisan, negotiated infrastructure package and that we will stick with that,” he said in a video shared on YouTube.
The proposal initially relied on taxpayers who avoid paying income tax. This initially attracted bipartisan support but external parties denounced it as a means for the IRS to pry into Americans’s private finances, according to the Associated Press.
About 84 percent of federal taxes are paid on-time and wilfully. The remaining portion equates to roughly $441 billion in uncollected funds. However, the latest IRS data suggests the unpaid amount could shrink to $381 billion due to fulfilled late payments and additional enforcement expenses.
IRS Commissioner Charles Rettig estimates the annual disparity between federal taxes owed and collected could be worth nearly $1 trillion. BL understands this is more than double what official government figures previously showed.
A recent U.S. Treasury analysis predicted the $600 billion tax gap in 2019 might climb to about $7 trillion over the next decade. The figure represents about 15 percent of all tax owed.
Since lawmakers scrapped the IRS provision, which would have generated $100 billion over 10 years, they will have to find other ways to fund the infrastructure package.
It has been challenging for senators to reach an agreement since debate has continued for weeks with little progress.
Senate Majority Leader Chuck Schumer stepped in and scheduled a procedural vote on July 22. However, Portman disagrees with the deadline because negotiations are still in their infancy.
“Start debate on what? You know, we do not have a product yet, and we will not have a product until we can finish the negotiations properly,” Portman can be heard saying. “This is a complex bill–it involves several committees [and] a lot of very tough issues because we have got to resolve them between us first, so … we are moving as fast as we can.”