John Lewis sponsors a bill providing low income taxpayers some relief

The news …

U.S. Representative John Lewis, Democrat of Georgia, appears to have some bipartisan support for a tax bill he announced earlier today.  The chairman of the House Ways and Means Oversight subcommittee along with the ranking member, U.S. Representative Mike Kelly, introduced the Taxpayer First Act.   Mr. Lewis and Mr. Kelly appear to have done a good job of putting together bipartisan sponsorship getting 26 other Democrats and Republicans to give their support.

The bill seeks to do or improve the following:

  • Improve the independent appeals process;
  • Limit the capacity of private debt collectors to target low income citizens by not allowing collection activity by private debt collectors against taxpayers whose income does not exceed 200% of the poverty level;
  • Prohibits collection of fees associated with the filing of an offer-in-compromise on taxpayers whose income does not exceed 250% of the poverty level;
  • Excludes from collection under qualified collection contracts taxpayers whose income consists substantially of disability insurance benefits; and
  • lengthens the time to pay taxes under an installment agreement from the current five years to seven years.

My initial thoughts …

I’ve visited the Internal Revenue Service office on West Peachtree Street in Atlanta a number of times.  Mostly the non-affluent are there trying to work out our tax issues.  Life happens and when you have to make decisions between paying rent and caring for a family or sending the IRS a check, family and rent will take precedent.

Under all the glitter of “The Real Housewives of Atlanta”, the movie and music production scene, and the high-end cars you may see whizzing around the city is a population under stress.  By one account the poverty level in Atlanta is approximately 22.4% meaning that almost 100,000 people in Atlanta live under the burden of poverty. You can hear the stress on the buses and trains as poor people head to work.  You can hear the financial stress in consumers’ voices as they express their concerns about food prices and the choices between one item and the other.

I don’t believe the bill goes far enough.  If Mr. Lewis is really concerned about the stresses of tax payment on the poor, he would add language that gets rid of the interest that accumulates on tax bills.  Poor people will never get from under the stress of late tax payments of they have onerous interest being added to their tax bills.  This only compounds the stress from owing student loans, taking care of sick family members, or trying to put children through college.

What’s next …

This is the second go-round for the bill. An original version of the bill (H.R. 1957) was passed by the House last April but issues regarding whether the IRS could dismantle a Free File Program caused an impasse in the Senate and a decision was made to remove the bill from Senate consideration and re-introduce a bill without the Free File Program.