Measure Allowing Examination of Tax Returns Holds Up Spending Bill

Congress applied the brakes to a $388 billion spending bill as Republican lawmakers scurried to repeal a measure that would allow the Appropriations committees to examine Americans' tax returns.

The Washington Post reported that Republican lawmakers said they were surprised that the provision had been included in the bill - a massive omnibus spending package that allocates government funding for next year.

The bill also includes the Bush administration's proposed changes in overtime rules, which critics say will deny an estimated 6 million workers overtime pay. An attempt to block the new rules - an amendment that would have retained overtime protections from all workers previously covered - was killed after the White House threatened to veto the entire bill.

Members of both parties said the incidents highlight a seriously flawed budget process. Because both sides can't agree on how to fund basic government services, many of the spending bills are delayed. Republican leaders then added all the remaining legislation into one omnibus package that cannot be amended.

In this case, Senate leaders promised that the bill would not be sent to the president for his signature until the tax provision is repealed by both houses. The measure rankled many lawmakers, as it would allow staff of House and Senate Appropriations committee to examine tax returns at IRS facilities. Some lawmakers said it set aside privacy protections, which usually would call for criminal penalties against those who reveal individual tax information.

House sources told the Washington Post that the IRS drafted the provision and it was added to the bill Thursday at the request of Rep. Ernest J. Istook Jr. (R-Okla.), who chairs the Appropriations subcommittee that oversees the IRS. Istook, however, said he was “in the dark” about the provision. “Honest mistakes were made but there's no conspiracy."

However, Sen. Charles E. Grassley (R-Iowa), who chairs the tax-writing Finance Committee, called the provision an "outrage" and said it will "bring us back to the doorsteps of the days of Nixon, Truman and similar dark periods in our tax history when tax return information was used as a club against political enemies."

You may like these other stories...

A new Gallup survey found that 58 percent of smokers in the United States see increased state and federal taxes on cigarettes as an act of unjust discrimination, while 39 percent believe the tax hikes are justified.The...
Liberal groups object to bill barring taxes on Internet accessThe Internet Tax Freedom Act hasn’t been a controversial bill. In fact, it’s so popular that senators are seeking to pair it up with a far more...
As complex as federal tax can get, at least you're only dealing with one agency: the IRS. But when you get into state and local sales tax, you're coordinating hundreds of jurisdictions that are constantly changing....

Upcoming CPE Webinars

Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.