July 23,2003

Senators Call for Hearing on Proposed IRS Program

Proposed Pilot Program for Earned Income Tax Credit Violates Privacy

(WASHINGTON, D.C.) In continued efforts to halt an Internal Revenue Service (IRS) program that requires low-income Americans to disclose intrusive personal information, Senator Max Baucus and Democratic and Independent members of the Senate Finance Committee today sent a letter to Finance Committee Chairman Charles Grassley calling for hearings to investigate the IRS program and search for alternatives.

On June 13, 2003, the IRS announced a new pre-certification program for the (EITC). The EITC is a refundable Federal income tax-credit for low- income working individuals and families, determined by income and family . Under the IRS pre-certification program, in order to qualify for the Earned Income Tax Credit, taxpayers would now have to submit personal information, including third-party validation such as medical records, letters from religious leaders, and other private material that is not required for any other tax credit.

In the letter to Chairman Grassley, the Senators stated that a hearing is necessary because the IRS pre-certification program, "is based on flawed IRS data, inefficiently utilizes scarce IRS resources, runs counter to the principles of our voluntary self-assessment tax system and congressional intent, and relies on questionable authority to proceed."

Last week, 45 Senators joined together to urge President Bush to prevent the IRS program from being implemented, stating their concern that the program would discriminate against low-income Americans and prevent them from receiving the tax relief they need.