Don't Mess With Taxes

One Congressman has an idea about what should happen in the wake of confirmation that the Internal Revenue Service purposely overlooked fake tax identity number applications.

IRS Commissioner Douglas Shulman should resign.

Rep. Sam Johnson told the tax agency head that in a letter that the Texas Ways and Means Committee member sent after it was revealed some IRS supervisors urged employees to ignore possibly fake tax ID applications.

Click image for a larger view.

The "ITIN" mentioned in the snippet of Johnson's letter pictured above stands for Individual Taxpayer Identification Number.

These numbers are used instead of Social Security numbers by individuals who must file tax returns but who don't qualify for the standard nine-digit numerical ID. ITINs generally are used by non-U.S. citizens.

After receiving complaints about the issuance of some ITINs, the Treasury Inspector General for Tax Administration (TIGTA) looked into the matter and found the allegations were true.

TIGTA's discovery of, as Johnson put it in his Aug. 8 letter to Shulman, such "indefensible and scandalous findings…leave me with the conclusion that through its actions the IRS, in effect, is a willing accomplice to tax fraud."

"In light of the report's findings, I ask that you and any other IRS officials who had direct oversight, knowledge or involvement with the ITIN program resign immediately in order to help restore the American taxpayer's trust in the IRS," Johnson said.

Part of continuing effort: Johnson has long objected to the use of ITINs as acceptable identification for taxpayers who apply for refundable tax credits, particularly the popular $1,000 per child tax credit.

In May 2011, the Texas Republican introduced H.R. 1956, which would allow only taxpayers who have Social Security numbers to claim the refundable portion of the child tax credit. Other members of Congress also have introduced similar tax credit/SSN measures over the years. A version of Johnson's tax credit limitation was included in a budget bill passed by the House this spring.

More Congressional questions: Johnson's letter also was the second formal written communication that Shulman received from House tax writers after TIGTA released its report this week.

Rep. Charles W. Boustany, Jr. (R-La.), chairman of the Ways and Means Oversight Subcommittee, didn't go as far as to ask Shulman to pack up his office, but he did send the IRS commish a letter demanding that the IRS "immediately account for the findings."

He gave Shulman until Aug. 31 to reply in detail to the TIGTA report and the specific questions that Boustany laid out in his letter.

I'm pretty sure that Shulman will do what Boustany asks. But I don't see him following through on Johnson's request.

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