11 09 2017

US Bill Would Limit IRS Asset Seizures

The National Taxpayers Union (NTU) has called on US lawmakers to support legislation to protect small businesses from "abusive" actions by the Internal Revenue Service (IRS).

The "Clyde-Hirsch-Sowers RESPECT Act" was introduced in May 2016 by Peter Roskam (R-IL) and Joseph Crowley (D-NY). It would prohibit the IRS from seizing bank accounts from business owners accused of committing violations unless the money is tied to a crime.

The NTU in a statement released on September 5 urged Congress to vote in favor of the bill, citing a 2015 report from the Institute for Justice that said the IRS seized USD242m in 2,500 cases between 2005-2012. Most of these cases were "structuring violations," it said, where the IRS suspected individuals of depositing cash in amounts under the proscribed USD10,000 threshold in order to avoid triggering their bank's mandatory reporting requirements. "In these instances, the IRS does not have to convict or even charge a victim with wrongdoing before seizing property and individuals face a costly, uphill battle to retrieve their assets," said the NTU.

If passed, the bill would require the IRS to show probable cause before seizing assets. The IRS claims it already does so, but the NTU insisted that "it is essential that taxpayer protections be codified in order to avoid exposing such fundamental rights to an administration's whims."
Scotland Starts Discussions On Income Tax Reform

The Scottish National Party is to discuss with opposition political parties whether and how to use the nation's new powers to set income tax rates, secured as part of the devolution agreement with the UK.

Ahead of the next Budget in March 2018, Scottish First Minister Nicola Sturgeon said the party would publish a paper that will set out the current distribution of income tax liabilities in Scotland; analyze a variety of different options, including the proposals of the other parties; explain the interaction between tax policy and the fiscal framework; and provide international comparisons.

She said that the paper would be used to "inform the discussions we will have with other parties ahead of the Budget."

"I give an assurance today that the Scottish Government will go into these discussions with an open mind and with the best interests of the country as a whole as our guiding principle, and I invite other parties to do likewise," she said.

From April 1, 2017, Scotland gained the power to set its own income tax rates and thresholds, within reasonable bounds. Before then, Scottish workers were subject to the same income tax treatment as the rest of the UK. Scotland chose to alter only the tax thresholds and not the rates in last year's fiscal package. As a result, the higher rate (45 percent, top tax rate) threshold in Scotland has been set at GBP43,430 (USD53,935) for 2017-18, compared with GBP45,000 (USD55,894) in the rest of the UK.

Sturgeon also said in her speech that the government would accelerate its review into business rates and publish an implementation plan by the end of this year. She also expressed interest in introducing "some form of land value based tax."