Congressman Denver Riggleman Stands Up for Tax Payers in Financial Services Hearing
Congressman Riggleman questioned Secretary Mnuchin about tax policy in a Financial Services Committee hearing on Wednesday. This was the second part of Secretary Mnuchin's testimony before the House Financial Service Committee on the State of the International Financial System. The Congressman used this opportunity to stand up for 5th District tax payers.
"I don't support a policy that treats these taxpayers differently, particularly in this case where the AMT (Alternative Minimum Tax) credits represent pre-payments or overpayments of tax and should not be subject to sequester." said Congressman Riggleman. "Can I get your commitment today that you will look into actions that the IRS can and should take on behalf of these companies to remedy this situation?"
Secretary Mnuchin promised to work to resolve the issue. This will be a big win for taxpayers across the country.
You can watch Congressman Riggleman's questioning of Secretary Mnuchin here, and a full transcript of the exchange can be found below.
Congressman Riggleman: Thank you, Madam Chairwoman. And thank you Mr. Secretary, I’m over here on the end, and thank you for coming back to committee this morning. I know the title of this hearing is the “State of International Financial System”, but before we get into that I wanted to quickly discuss a tax issue. The IRS recently announced a corporate alternative minimum tax refunds received under the Tax Cuts and Jobs Acts will longer be subject to sequestration, but AMT refunds received by taxpayers in lieu of claiming bonus depreciation under section 168 (k)(4) will remain subject to sequestration. Taxpayers earn no interest on AMT prepayments and are counted dollar for dollar against future liabilities. These payments operate as interest free loans to the government that remain until the taxpayer incurs a liability to which the AMT credit is applied. In many cases, these prepayments extend for decades. The only way to receive an AMT credit is to pay the tax, so these are not loopholes exploited by American businesses but serve as a way to reduce their tax liabilities should they owe money to our favorite Uncle Sam. I don’t support a policy that treats these taxpayers differently, particularly in this case where the AMT credits represents pre-payments or overpayments of tax and should not be subject to sequester. And, sir, Can I get your commitment today that you will look into actions that the IRS can and should take on behalf on these companies on the AMT credit specifically to remedy this situation?
Secretary Mnuchin: Yes, I can tell you I am familiar with it, it is a technical issue we are working with OMB on trying to resolve it.
Congressman Riggleman: Thank you, I knew that was a pretty quick answer, so thank you for that. Following up on tax issues, on March 5th of this year the Department of Treasury released a policy statement on the Tax regulatory process. This policy statement established the IRS’s commitment to notice and comment rulemaking, the limited use of temporary regulations, and the proper rule of guidance documents. One key assertion of this policy statement says, “Subregulatory guidance is not intended to affect taxpayer rights or obligations independent from underlying statutes or regulations. Unlike statutes and regulations, subregulatory guidance does not have the force and effect of law.” I wholeheartedly agree with this statement. And what I love about bureaucracy is we actually have guidelines about guidelines I think that is incredible. But, would you be willing to officially adopt this position as the Chair of FSCOC?
Secretary Mnuchin: I will review it with FSCOC and take it up with them, it sounds like a good idea.
Congressman Riggleman: So I think, the entire Administration needs to have the same view of guidance, I would argue that if this document is good enough for the IRS it should be equally appropriate for the FSCOC, or any federal regulatory body in the United States. Again, its just based on my business background with regulations about regulations about guidance. I see my time is running short but one final topic I wanted to discuss is cyber security. In June of 2017 Treasury issued a report title “Nonbank Financial, Fintech, and innovation”. In this report Treasury states “Regulatory fragmentation, overlap, duplication, however, can lead to ineffective regulatory oversight and inefficiencies that are costly to the taxpayers, consumers, and businesses. By the way Mr. Secretary I think you can see a theme in my questioning today. The report also says that “cybersecurity is addressed among a broad group of federal state regulators though the financial and Banking Information Infrastructure Committee (FBIIC)”. When the prudential regulators were here last week this is something I talked about, and also noted that the FBIIC, or Financial and Banking Information Infrastructure Committee is chaired by Treasury and comprised of over 15 members from additional regulators. Can you quickly discuss how Treasury working with the numerous regulatory bodies to harmonize cybersecurity regulations to protect consumers without creating a cumbersome framework?
Secretary Mnuchin: Yes thank you, it is a major priority of mine we’ve added additional resources to the department we’ve met with public and private partnerships on this and we really two tasks, one is harmonization across the regulators, we’ve recently had a productive meeting with banks CEO’s and regulators on that. The second, is making sure we have better coordination between our intel, our technical people, and the private sector, to make sure we are fully prepared.
Congressman Riggleman: Thank you very much, I think in closing I would ask as we go forward I would hope that we don’t have any guidance come out about sub regulatory guidance which is about the guidance that is not regulated. Thank you, and I yield my time.