Sen. Warren: ‘We Need To Fund the IRS So It Has All the Tools It Needs To Ensure the Ultra-Wealthy Pay the Taxes That They Owe’

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In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo)

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WASHINGTON DC – During an exchange with the U.S. Commissioner of the Internal Revenue Service (IRS), Charles Rettig, United States Senator Elizabeth Warren (D-Mass.) stressed the administrability of the Billionaires Minimum Income Tax proposed in President Biden’s Budget.

The Senator also expressed support for the $80 billion in IRS funding that the President and Congressional Democrats are calling for to turbocharge the agency’s ability to take on wealthy tax cheats and administer the Billionaires Minimum Income Tax. 

Commissioner Rettig told Senator Warren that the IRS had received “just under 300,000” estate tax returns in the past decade. In comparison, the President’s Billionaires Minimum Income Tax would apply to just 20,000 taxpayers, who would largely remain the same, with largely the same assets, each year. Commissioner Rettig also emphasized that the IRS has “the most sophisticated financial examiners on the planet” and agreed with Senator Warren on the need to boost IRS funding to give them the resources they need to take on wealthy tax cheats.

Transcript: The IRS, the President’s Fiscal Year 2023 Budget, and the 2022 Filing Season
U.S. Senate Committee on Finance Thursday, April 7, 2022

Senator Warren: Thank you, Mr. Chairman. Right now, millions of hardworking Americans are getting ready to file taxes. But thanks to loopholes in our tax code, for billionaires, paying taxes can be optional. 

This has to stop. Now, last week, President Biden proposed a new minimum tax to ensure that the very, very rich pay at least 20% in taxes, every year, on all their income.

I’ve long called for a tax on the wealth – not just the income – of ultra-millionaires and billionaires.  The President’s proposal is different, but it is a giant step forward. 

Now, critics claim that the IRS just isn’t up to the task of administering a tax like this because it requires assessing the value of complicated assets and doing this calculation for many taxpayers.  

This is a question about your agency’s competency so I want to ask you about it, Commissioner. In fact, the IRS already has a lot of experience examining the assets of the ultra-wealthy. For more than a hundred years, the IRS has valued the property of multi-millionaires in order to apply the estate tax. 

So Commissioner Rettig, about how many estate tax returns have been filed with the IRS just in the past decade?

Commissioner Rettig: Just under 300,000. 

Senator Warren: Just under 300,000? Alright. And do you know anything about the combined worth of those, off hand?

Commissioner Rettig: I don’t. 

Senator Warren: Okay. I think the estimate will be well over a trillion dollars. Does that make sense?

Commissioner Rettig: Not from my private practice experience, but I’ll go with it. 

Senator Warren: Okay, alright. For comparison, the President’s billionaires’ tax would only apply to 20,000 taxpayers. 

Now, the estate tax has got to be, generally, actually harder to administer because, by definition, it applies to new taxpayers every time it is paid because it isn’t triggered until someone dies and an asset is transferred to an heir.  

By comparison, the President’s billionaires’ tax would mostly apply to the same taxpayers year after year—making valuation much simpler. 

Some of the valuations that the IRS already does can be quite complex. In 2020, the IRS completed 1,454 estate tax audits, including 770 estates valued at over $10 million.

So Commissioner Rettig, what kinds of assets do IRS investigators examine in these estate tax audits that they’re performing every year?

Commissioner Rettig: The examiners in that space are known as the estate tax attorneys. They’re sophisticated examiners, they’re among our best and they, estate taxes based on evaluations at a point in time, date of death, or even six months after at a point of date of death, and the examiners look to see if the values were appropriate and if deductions were appropriate etc, etc. in appropriate cases, they may bring in engineers which are really economists and evaluations specialists. 

Senator Warren: Instead of worrying about the kind of property that they look at in value?

Commissioner Rettig: It’s the valuation of assets and discounts people claim for the assets. 

Senator Warren: So like – 

Commissioner Rettig: that would be most of the issues. 

Senator Warren: Mansions, ownership of businesses, 

Commissioner Rettig: Cryptocurrency,

Senator Warren: there you go, there you go. So the IRS has lots of experience valuing assets like mansions, expensive art, and private companies – exactly the assets that would be subject to the President’s billionaires’ tax. 

But to make anything work, it is critical that we fund the IRS so that it has all the tools it needs to ensure the ultra-wealthy pay the taxes that they owe. 

And that is why President Biden and Congressional Democrats have proposed $80 billion in funding for the IRS.

Commissioner Rettig, how would additional funding turbocharge the IRS’s ability to take on wealthy tax cheats or administer a new tax on billionaires like the kind the President has proposed?

Commissioner Rettig: We have the most sophisticated financial examiners on the planet. And they’re also the most dedicated folks on the planet in this particular space. We need to support them by providing them meaningful tools, resources, training, and at some point in time when I started in practice in 1981, the IRS was a place where people wanted to go and got there, earned their stripes if you will and then maybe some left for private practice, some certainly stayed, we need to get back to that and the funding will certainly help us get to that level. 

Senator Warren: Well, thank you, thank you for your leadership on this Commissioner Rettig. We need to fund the IRS to make sure wealthy tax cheats pay what they owe. 

But we also need to fix our broken tax rules. Billionaires who pay a lower tax rate than public school teachers are freeloading—and we need to make it stop. The President’s proposal for a minimum income tax on billionaires is about exactly that. I’m with him on this.  The American people are with him on this.  So let’s get it done.  

editor

email: editor@FraminghamSource.com call or text at 508-315-7176


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