U.S. Rep. Ron Estes (R-KS) on May 23 sponsored a bipartisan bill to hold the Internal Revenue Service (IRS) accountable for proper structured payments of corporate taxes.
“Providing certainty and fairness in our tax code is key to growing our economy,” Rep. Estes said.
The congressman introduced H.R. 2985 with cosponsor U.S. Rep. Brad Schneider (D-IL) to amend Section 965 of the tax code to clarify that payment of taxes on deferred foreign income in installments will not prevent credit or refund of overpayments or increase estimated taxes, according to the congressional record.
“This bipartisan legislation will ensure the IRS follows congressional intent by allowing companies to have the necessary cash flow to plan for the future and make structured payments on their tax liability,” said Rep. Estes.
Section 965 of the tax code permits companies to pay a transition tax that gets applied to their overseas earnings over an eight-year period, according to information provided by Rep. Estes’ office.
However, the IRS has forced taxpayers to apply tax refunds and overpayments toward their outstanding eight-year liability, effectively penalizing those who sufficiently paid taxes to the federal government, according to the information.
H.R. 2985 would provide an administrative fix to current tax law and ensure congressional intent is followed by reaffirming the eight-year schedule and divergent nature of tax liabilities, according to Rep. Estes’ office.
The measure has been referred for consideration to the U.S. House Ways and Means Committee.