Daily Tax Report ®

The House May Be Senate’s Only Solution on IRS Bill Stalemate (2)

May 1, 2019, 6:13 PMUpdated: May 1, 2019, 9:26 PM

The effort to pass a broad tax administration bill continues to struggle in the Senate.

The push began to falter as Democrats raised concerns about a provision that they fear could keep the Internal Revenue Service from ever offering its own free filing product. The bill has stalled and there is no obvious way forward, according to a Republican aide.

Powerful reporting from ProPublica unveiling efforts in the tax preparation industry to keep low-income taxpayers from filing for free has added fuel to the existing concerns with the House-passed bill (H.R. 1957).

The reaction has made it difficult to move forward with the bill as is, according to the Republican aide. That would mean changing the legislative text, and the easiest way to do that is for the House to pass the bill again, the aide said.

Much of the IRS bill’s provisions were negotiated among lawmakers over the last several years, and previous efforts have passed in the House. Lawmakers in both chambers seemed optimistic about its prospects up until their two-week Easter recess—a sign of the power of the current concerns.

Ways and Means Committee Chairman Richard Neal (D-Mass.) said May 1 he has talked with Senate Finance Committee ranking member Ron Wyden (D-Ore.) about tweaks to the bill.

If a “clarification needs to be done, I will certainly be glad to work with Chairman Neal and others to do that,” Ways and Means ranking member Kevin Brady (R-Texas) said.

An earlier version of the bill (H.R. 7227) passed the House last year, but also stalled in the Senate.

“I don’t want to negotiate through your publication,” Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said May 1, when asked whether the provision could be stripped from the bill, which passed the House in April.

Grassley also acknowledged that Democrats’ qualms with the bill may not get resolved. Senators are discussing the issue, he said.

New York Taking Notice

Individuals who earn less than $66,000 can file taxes for free under an agreement between the agency and tax preparation companies.

The scrutiny of H&R Block Inc. and Intuit Inc., which makes TurboTax, is extending beyond Congress.

New York Gov. Andrew Cuomo (D) on May 1 called for the state Department of Financial Services and Department of Taxation and Finance to investigate TurboTax and H&R Block following ProPublica’s reporting.

—With assistance from Keshia Clukey.

(Updates with additional comments throughout. )

To contact the reporters on this story: Robert Lee in Washington at rlee@bloombergtax.com; Kaustuv Basu in Washington at kbasu@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com

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