April 15, 2019
PORTLAND, ME – U.S. Senator Angus King (I-Maine) today met with tax professionals, advocates, and clients to discuss ways to help low-income Maine people navigate the complexities of tax season. The meeting comes on tax day, and follows an intensive effort by Senator King to help ease the burden many people across Maine are feeling as the consequences of the new tax law take effect. During the meeting, Senator King signed a letter to the Senate Appropriations Committee urging it to reverse cuts to the IRS enforcement budget and to provide comprehensive funding for the Low Income Taxpayer Clinic program to help ensure free representation to low income taxpayers in controversies involving the IRS.
“Several weeks ago my office learned of an anomaly about how audits are done by the IRS throughout around the country. What jumped out at us was that there were two counties in Maine where the people were more heavily audited by the IRS than the rest of the country. The two counties were Piscataquis County and Washington County, two of the poorest counties in Maine,” Senator King said. “What struck me was why is the IRS expending its resources disproportionately in counties populated by low income people? And it turns out they’re auditing something called the Earned Income Tax Credit, which is a Reagan-era program designed to help working people make ends meet. This just does not seem right, because six percent of the estimated tax fraud comes out of this program, whereas fifty percent comes out business under-reporting of income. They ought to go where the money is. And they shouldn’t be heavily concentrating on places like Washington and Piscataquis County.
“On tax day, we want a fair tax system that is fairly enforced across the country, that doesn’t concentrate on the people who can least afford it, and that funds the important measures that our government works on. But we want people to feel that they are being treated fairly by the government, and importantly, by the IRS.”
Senator King took these actions at Pine Tree Legal Assistance in Portland, a statewide legal aid provider and home to Maine’s only Low Income Taxpayer Clinic. To meet the needs of Maine residents throughout the state, Pine Tree relies on the generous donation of time and expertise from private attorneys throughout the state.
A copy of Senator King’s letter is below and can be read in full HERE.
Senator King has worked to make sure Maine taxpayers are not overwhelmed this tax season, which is the first filing season that will reflect the new requirements and consequences of the tax bill that was passed in December 2017. Today, Senator King, Senator Sherrod Brown of Ohio, and 19 other Senators plan to send a letter to the Senate Appropriations Committee requesting robust funding for the IRS so that the agency can focus on taxpayer assistance and appropriate enforcement. Last week, he wrote a letter challenging the IRS to refocus its limited resources away from disproportionately auditing lower-income households who utilize the EITC. Also last week, he cosponsored the Working Familes Tax Relief Act, legislation that would cut taxes for people and families by expanding the Earned Income Tax Credit (EITC) and Childcare Tax Credit (CTC). The bill would benefit 400,000 Maine people, including 164,000 children. In March, he wrote a weekly column updating Maine people on the details and concerns he’d been receiving surrounding the impact of the new tax law, and urged Maine people to reach out to their local Taxpayer Advocate with questions. Also in March, the IRS announced it would reopen the Bangor Taxpayer Assistance Center (TAC) following a letter that Senator King sent with Senator Susan Collins and Congressman Jared Golden stressing the importance of the Bangor TAC’s service to rural Maine people.
Dear Chairman Kennedy and Ranking Member Coons:
As you finalize the Fiscal Year 2020 (FY20) Financial Services and General Government Appropriations bill, I respectfully ask that you provide $18 million in funding for the Low Income Taypayer Clinic (LITC) program, which provides representation before the IRS to Maine people who can least afford it. I also respectfully request that you reverse the cuts to IRS enforcement that have occurred since FY 2010 by increasing the IRS enforcement budget to $6.5 billion in equal increments of $400 million per year over the next four years. For FY20, I respectfully request an IRS enforcement funding level of $5.3 billion.
In Maine, the LITC program helps a dedicated Pine Tree Legal Assistance attorney gain Audit Reconsideration for hardworking Mainers who face erroneous IRS audit decisions. The National Taxpayer Advocate reports that in a dispute with the IRS, a represented taxpayer is nearly twice as likely to gain a positive outcome as an unrepresented taxpayer is. Low-income taxpayers deserve the protection that the services of a LITC program-funded representative provides.
Unfortunately, current LITC program funding does not provide an adequate amount of representation in many high-need areas, including Maine. In fact, current funding enables Pine Tree Legal Assistance to hire just one attorney to serve all of Maine’s low-income people who need representation before the IRS. We must do more to protect our most vulnerable citizens by providing them with the representation that they require. That is why I request that you increase LITC program funding by 50 percent, to $18 million.
The relatively high level of need for representation among our low-income citizens has arisen in part because the IRS enforcement budget has been cut by nearly 25 percent in real terms over the past decade. A deliberate effort to return the IRS enforcement budget to the FY2010 level will bolster the Service’s tax enforcement efforts and provide a net benefit for taxpayers. Every additional dollar invested in tax enforcement yields five dollars in added revenue. Year after year, wealthy individuals and large corporations gamble that the complexity of the tax code coupled with insufficient enforcement resources will allow them to cheat the system. That kind of “pay-to-play” system is unjustifiable.
While it is important that Congress tackle our nation’s deficit, continued cuts to the IRS hurt taxpayers in the long-run. We must ensure that the agency has adequate resources to serve taxpayers, promote compliance, and properly enforce our nation’s tax code. I therefore urge you to provide the IRS with enforcement funding of $5.3 billion in FY20.
Thank you for your consideration of these requests.