ATR Urges House to Oppose Katrina Housing Bill

On behalf of Americans for Tax Reform (ATR), I write to express my opposition to Section 5 of H.R. 1562, the "Katrina Housing Tax Relief Act of 2007," as that legislation was approved by the House Ways and Means Committee. Eliminating a pre-levy collection due process hearing on an across-the-board basis erodes one of the strongest protections against an overaggressive and overreaching Internal Revenue Service.

Removing this pre-levy protection on an across-the-board basis eliminates the formal mechanism that puts the taxpayer on even ground with the tax collector. Without this pre-levy hearing, the IRS can "shoot first and ask questions later" by seizing property and having the taxpayer tell their story after the fact.

I believe this provision reflects a larger problem with the so called "tax gap" some members of Congress believe they can raise $345 billion per year. In order to achieve this number the IRS would have to knock down the doors of millions of unsuspecting Americans. Moreover, we are being told the tax gap is being used to "reduce the deficit" when in fact this provision is being used for more government spending.

This particular revenue-raising provision was not intended to turn the IRS into a militant tax collecting organization. I agree that abusive and repeatedly delinquent taxpayers must be sought out and their debt collected, but Section 5 of H.R. 1562 must be narrowed in scope to ensure that innocent taxpayers are not denied appropriate due process protections. I would hope that this provision could be revised to draw a clear distinction between repeat bad actors and innocent taxpayers who may, in fact, be victims of IRS mistakes. The broader solution, however, is not a more powerful IRS and more sections and addendums to the tax code. The answer is truly a simpler, more concise tax code.

As April 15th approaches millions of American taxpayers everywhere will begin the arduous task of filling out their federal tax returns. We believe a simpler and understandable tax code is the silver bullet that solves the tax gap dilemma.

Once again, I urge you to oppose H.R. 1562 unless Section 5 of the Committee-passed bill is significantly modified to ensure that the provision more narrowly targets bad actors, while providing innocent taxpayers adequate due process protections.