Pascrell: ProPublica Report Reflects Broken Tax System

PATERSON, NJ – U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chairman of the House Ways and Means Subcommittee on Oversight, commented on a report by ProPublica describing how some of the richest Americans pay little taxes commensurate with their titanic fortunes. Simultaneously, he has written the below letter to Internal Revenue Service (IRS) Commissioner Charles Rettig asking if the information documented was leaked illegally by the IRS.

“While I am interested in seeing the details, today’s bombshell report reflects what we know all too well: our tax system is broken and the richest among us do not pay their fair share,” said Rep. Pascrell, a leading congressional critic of tax unfairness. “These findings should enrage every law-abiding American who works hard and pays their fair share only to see the most monied on earth getting a free ride on their backs. Americans are right to think the system is rigged. I am outraged but am not the least bit surprised. These individuals may not be breaking the law, but the system they exploit needs reform yesterday. Far from the family farms or mom and pop shops wrongly invoked by critics, my legislation to close the stepped-up basis loophole would ensure the capital gains taxes on these billionaires’ investments are paid.

“If these documents were released to the press illegally, there should be consequences for those breaking the laws protecting the privacy of taxpayer information. I want to be sure that no taxpayer information included in this report came from within the Internal Revenue Service and so I am calling on the Commissioner to investigate and report whether the IRS was the source of the raw data. But we cannot ignore this report. President Biden and the Democratic House have made tax fairness an absolute top priority. If we don’t act swiftly to fix the American tax system, public confidence may be fractured forever.”

Pascrell’s Oversight Subcommittee is co-leading a hearing on Thursday with the Select Revenue Measures Subcommittee to review the Tax Gap.

The text of Chairman Pascrell’s letter to Commissioner Rettig is provided below.

June 8, 2021

The Honorable Charles P. Rettig

Commissioner

Internal Revenue Service

1111 Constitution Avenue, NW

Washington, DC 20224

Dear Commissioner Rettig,

An article recently appeared in ProPublica on tax payments by wealthy taxpayers, which identified, by name, certain taxpayers and purported to reveal their confidential tax return information.^[1]

The article indicates that “ProPublica is not disclosing how it obtained the data, which was given to us in raw form, with no conditions or conclusions,” but the article characterizes the data as “IRS files,” “IRS information,” and “IRS records.”  I am concerned as to how raw tax return data may have been obtained and whether the data could have come from the IRS, recognizing that other entities also have access to tax return information.  If there is any indication that the confidential data came from the IRS, I would like to know.

Further, I would appreciate learning what investigations are underway with respect to the source of the data and any other information you can provide to me at this time.  When available, I would like a report on the IRS’s findings and an update on any actions resulting from your investigations.

Sincerely,

[1]  Jesse Eisinger, Jeff Ernsthausen, and Paul Kiel, “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax,” ProPublica (June 8, 2021), https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax.