Washington, DC - Bipartisan lawmakers from the House Committee on Ways and Means are applauding the Internal Revenue Service (IRS) today for suspending the collection of certain penalties on small businesses. On June 13, 2009, bipartisan lawmakers from the House Committee on Ways and Means and the Senate Finance Committee sent a letter to IRS Commissioner Douglas H. Shulman, requesting assistance while Congress works on legislation to help small businesses that invested in listed tax shelter transactions that generated modest tax benefits, but resulted in tax penalties significantly larger than the tax benefits received.
These disproportionate consequences were unexpected at the time the penalty was enacted. The Members expect to introduce bipartisan, bicameral legislation to modify the law and make the penalties more proportional to the tax savings.
“I am glad that the IRS has decided to do what is fair and allow Congress to correct the unintentional consequences of a law intended to target big corporations," said Ways and Means Oversight Subcommittee Chairman Lewis (D-GA). “This penalty has unfairly punished far too many small businesses, many of whom are feeling the crunch of this economic downturn more acutely than other sectors of the economy. These issues require tax law changes that Ranking Member Boustany and I support, and I am eager to move forward with legislation."
“As our economy continues to recover, small businesses lead the way, and today’s announcement by the IRS ensures those same small businesses are not disproportionately penalized," Ways and Means Oversight Subcommittee Ranking Member Charles Boustany (R-LA) said. “I appreciate Commissioner Shulman’s quick action, and I look forward to working with Chairman Lewis and the Senate to develop sensible rules moving forward."
