joint committee on taxation

Travis A. Wise
 

The Joint Committee on Taxation
 
The Joint Committee on Taxation is a Congressional committee made up of five members each of the House and Senate.  The Committee was formed in 1926 to investigate and report on inefficiencies and waste in the IRS, and determine how to simplify the Service.  The Committee periodically issues reports to Congress on proposals for simplifying the IRS.
 
The Committee does not represent the views of the majority or minority party in Congress, therefore its recommendations are supposed to be non-partisan. 
 
The Committee has the power to review all refunds or credits in excess of $1,000,000.  The IRS submits a history of each large refund and credit to the Committee, which examines the technical aspects of the case and tries to discover if taxpayers are taking advantage of tax loopholes to get large refunds.  The Committee is required to issue a report to Congress with the names of all persons and corporations to whom such refunds and credits were made, along with the amounts.  If the Committee determines taxpayers are taking advantage of the tax code, they will propose changes to the law.  The Committee can also propose adjustments to large refunds if they disagree with the IRS’s determination.
 
The Committee also plays an integral role in every stage of the legislative process for new tax laws.  For example, the Committee assists members of Congress in preparing tax bills, and works with the Ways and Means Committee to analyze the bills.  The Committee also issues reports summarizing complex tax bills so that members of Congress who are not familiar with the tax code can understand the bills they are voting on.
 
The Committee also determines the revenue effects of any proposed tax law changes. 
Under the Budget Enforcement Act of 1990, any bill which would reduce taxes must be offset with a tax increase or a decrease in spending.  The Joint Committee estimates how much revenue will be lost by any given tax decrease over a five-year period.
 
As an example, the Committee determined that the tax relief granted to victims of the 9/11 event would have a net reduction in revenue of $360 million dollars from 2002 through 2011 (see attached).
 
Each year, the Committee undertakes a study on the efficiency of the IRS, and submits recommendations to Congress for simplifying the IRS.  This year the simplification report was 602 pages.
 
The Committee’s website (http://www.house.gov/jct/) is a good source of background information and legislative history for various tax laws dating back to 1981.  The website has a search engine to simplify finding tax law information. 

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