Legislation led by U.S. Rep. Peter Roskam (R-IL) to reform Internal Revenue Service (IRS) civil asset forfeiture tools and his other priorities to protect taxpayers cleared the U.S. House last week as part of a larger IRS modernization initiative.
The House on April 18 passed the Taxpayer First Act, H.R. 5444, a key part of a package of legislation designed to revamp the IRS for the first time in more than 20 years – including three measures advocated by Rep. Roskam.
“The Tax Cuts and Jobs Act provided tax relief to millions of Americans; now we’re taking the next step and redesigning and modernizing the IRS to work for taxpayers,” Rep. Roskam, a member of the U.S. House Ways and Means Subcommittee on Tax Policy, said. “These bills are part of that process and will help put an end to IRS abuse of authority and provide another avenue to help people simplify the tax filing process.”
Included in the Taxpayer First Act was Rep. Roskam’s Clyde-Hirsch-Sowers RESPECT Act, for the Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools Act, H.R. 1843.
Rep. Roskam introduced the RESPECT Act in March 2017 to limit the IRS’s ability to seize money from individuals without first charging them with a crime, Rep. Roskam’s office said.
The bill followed nearly two years of Ways and Means Oversight Subcommittee investigations into the IRS’s use of civil asset seizures. The cases involved allegations of law-abiding business owners “structuring” cash transactions totaling under $10,000 to avoid reporting requirements under the Bank Secrecy Act, according to background supplied by Rep. Roskam’s staff. When business owners tried to seek the return of their money, the cases were referred to the U.S. Department of Justice, which attempted to hold their funds long enough to compel settlements and the forfeiture of a portion of the seized assets.
“The IRS has acted particularly egregiously in regards to civil asset forfeitures and Congress has a responsibility to hold them accountable on behalf of the people we represent,” Rep. Roskam said.
Under the RESPECT Act, the IRS would be required to demonstrate probable cause that business funds were generated by criminal activity or an illegal source before seizing assets. Additionally, defendants would have access to post-seizure hearings. If a judge was to order the return of seized assets in a structuring case, the IRS would be required to return the assets with tax-free interest.
Two other measures supported by Rep. Roskam would ensure that preparing and filing taxes is affordable and efficient for all taxpayers.
Rep. Roskam introduced the Free File Permanence Act of 2017, H.R. 3641, in August 2017. The IRS’s Free File Program, which Rep. Roskam’s office estimates saves the federal government $13 million in processing costs each year, would be made permanent under the bill. The legislation would expand the use of the program and continue to provide free online tax preparation and electronic filing services to the lowest 70 percent of taxpayers by income, among other provisions, according to the text of the bill.
Rep. Roskam also cosponsored the Volunteer Income Tax Assistance Permanence Act of 2017, H.R. 2901, which U.S. Rep. Carlos Curbelo (R-FL) introduced in June 2017 to ensure that individuals earning less than $54,000 per year, or those with limited English proficiency, have access to free tax preparation services through community partnerships.