Thursday, April 26, 2007

Congress, Bush call for crackdown on tax scofflaws

Congress is pressuring the Internal Revenue Service to do a better job of finding those who should be filing tax returns but haven't done so, while President Bush wants to impose stiffer penalties, says The Wall Street Journal (April 25, 2007. Subscription required.)

"Those who owe the IRS a tax return but fail to file are doing more than just breaking the law," said
Senate Finance Committee Chairman Max Baucus, a Montana Democrat. "They're draining our economy of vital resources that we need to pay for health care, education and even tax relief."

Under the president's plan proposed earlier this year, an individual who willfully fails to file tax returns in any three years within a five consecutive year period would be subject to a new criminal penalty if the total tax liability is at least $50,000. The president's proposal would classify such a failure as a felony. If convicted, an individual could face a fine of as much as $250,000, imprisonment for as much as five years -- or both.

If this proposal becomes law, "it will raise the stakes considerably for those charged with failure to file, particularly for professionals, such as lawyers and accountants, who have their licenses at stake," Mark Matthews, a former deputy IRS commissioner, told the Journal .