“Really it could reduce the amount of audits on otherwise compliant taxpayers by having this information available,” Mazur said. “Conversely it would increase the scrutiny on taxpayers who are kind of grossly noncompliant where there’s large inflows and outflows into accounts and relatively small amounts of taxable income reported.”
Rep. Brad Wenstrup, R-Ohio, expressed concern that asking banks to effectively conduct enforcement on behalf of the IRS “puts their reputations and their relationships with their customers at risk.” He also questioned Mazur on what outreach the administration was doing to ensure smaller and independent banks aren’t “smothered with compliance burdens.”
“For the smaller and community banks, there could be some cost,” Mazur said. “This is something where we’d be as an administration very willing to work with the affected institutions to figure out what is the best way to go about doing this.”
One of the few things members of both parties agreed on during the hearing is that the source of the leak should be investigated.
Ways and Means Oversight Subcommittee Chairman Bill Pascrell Jr. said he spoke with IRS Commissioner Charles Rettig about the investigation Wednesday. The New Jersey Democrat said he expects “a prompt and transparent response.”
Doug O’Donnell, the IRS deputy commissioner for services and enforcement, told the panel that Rettig immediately referred the matter to Treasury Inspector General for Tax Administration J. Russell George for investigation and that George confirmed receipt of the referral.
“TIGTA is the authorized federal agency to investigate,” O’Donnell said, noting Treasury also referred the matter to the FBI and the U.S. attorney’s office for the District of Columbia. Intentionally disclosing confidential taxpayer information is a felony.
“We fully support any investigation undertaken,” O’Donnell added. “We take this matter very seriously, and we’ll be pushing as hard as we can to ensure that we learn as soon as possible what actually did happen.”
Republicans, however, were not assured that the ProPublica leak was an isolated incident that won’t be repeated. Some harkened back to the controversy during the Obama administration over the IRS division that processes tax exemptions singling out conservative groups’ applications for extra scrutiny.
“My underlying concern is that the IRS contains an immense amount of power,” Smith said. “I was at the airport a while back and I noticed where there was an IRS agent who was empowered to walk around the magnetometers at the airport.”(c)2021 CQ Roll Call Distributed by Tribune Content Agency, LLC