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Congressman Holding Comments on May 9 HW&M Hearing “Understanding the Tax Gap and Taxpayer Noncompliance"

Congressman Holding’s comments at the House Ways and Means Committee hearings held on May 9th, “Understanding the Tax Gap and Taxpayer Noncompliance” show why holding hearings on the tax compliance issues for Americans living and working overseas is vital to the process of passing Residency-based tax legislation. 

Congressman Holding acknowledged that the tax reform bill passed in 2017 (Tax Cuts and Jobs Act-TCJA) did not address the tax compliance issues of Americans overseas. His questioning of the Chief Research and Analytics Officer of IRS, Benjamin Herndon, indicates that US Congressional and Administrative offices lack accurate data and information on the community of US Citizens living and working overseas.

Congressman Holding noted that in evaluating the tax gap there was a need to “fully understand the problems faced by Americans around the world and craft solutions that simplify the code and encourage compliance for Americans overseas.” Decisions that affect the community need to be based on a full understanding of the community; who they are, where are they located, what jobs they hold, etc. ACA’s work on revenue estimates is providing Congress with some of this data, however, hearings where this and other data, including individual testimonies, is needed.

All witness testimonies from the May 2 hearing can be found here. Of particular interest are the comments on international tax compliance by the Treasury Inspector General for Tax Administration (TIGTA), J. Russell George found on page 6 of his testimony.