Legislation

Sen. Max Baucus unveils second draft of tax reform legislation

Max Baucus

Max Baucus

Sen. Max Baucus’ (D-Mont.) unveiled a second draft of proposed legislation on Wednesday to curb tax fraud and combat identity theft, which is estimated to cost taxpayers and the federal government billions every year.

“Combating fraud will protect Montanans and save taxpayers billions of dollars,” Baucus said. “These simple, commonsense ideas will save time and hassle for families and small businesses and help us raise revenue to pay down the debt and invest in jobs without raising taxes on anyone.”

In April, Baucus held a hearing in which he pointed to findings by the Treasury Inspector General for Tax Administration that found 1.5 million potentially fraudulent tax returns remained undetected in 2011, costing an approximate $5.2 billion in fraudulent refunds.

The IG estimated that tax identity theft could cost the Internal Revenue Service $21 billion over the next five years, if left unaddressed.

Earlier this week, Baucus unveiled proposals to place a minimum tax on foreign profits and one-time tax on existing assets abroad, similar to a plan unveiled by President Obama in July, Politico reports.

The drafts also include eliminating sections of the “check the box” rule that allows firms to ignore some foreign subsidiaries for tax purposes—a provision used by Apple and Microsoft, which have drawn criticism for using the rule to hold assets in foreign subsidiaries without paying tax.

Republicans had urged Baucus to delay releasing the discussion drafts until separate budget negotiations finish on Dec. 13, according to Politico.

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