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IRS Responds to Pressure From Rep. Chu, Waives Tax Fees for Individuals

January 16, 2019
Press Release

Washington, DC — Following pressure from Rep. Judy Chu (CA-27), including introduced legislation and a July 2018 letter to the Internal Revenue Service (IRS), the IRS today announced that it would waive the penalty for under-withholding on taxes for certain individuals. This change follows an IRS decision in 2018 to grant leniency, grace periods, and penalty waivers to multinational corporations. After that 2018 decision for corporations was announced, Rep. Chu led 12 Democratic members of the Ways and Means Committee on a letter to Acting IRS Commissioner David Kautter urging the IRS to give individuals and small businesses similar leniency. In October 2018, the IRS Information Reporting Program Advisory Committee released its annual report which included the recommendation made by Rep. Chu and the Ways and Means Democrats. Following that report, Rep. Chu introduced the Taxpayer Penalty Protection Act, a bill that would shield taxpayers from withholding penalties for the 2018 filing year should they find themselves to be under-withheld. Rep. Chu released the following statement:

“The Republican tax law was hastily written and passed in a rush, with barely any substantive debate. That meant that not only were taxpayers denied an opportunity to fully grasp this law’s worsening effects on things like inequality, they were also unprepared for how it would impact their own filing. Because of this rushed process, GAO found that 1 in 5 five taxpayers are expected to owe the IRS this year. Knowing their law created confusion, the Trump Administration rushed to offer relief to corporations by waiving the penalty for the new transition tax on foreign earnings. But it took months of concerted legislative effort to get them to offer similar support to individuals. I’m incredibly pleased that the IRS responded to our letter and legislation by deciding to help individuals. This is a victory for taxpayers like those in my home state of California, who are hard hit by the Tax Cuts and Jobs Act’s cap on the State and Local Tax Deduction and the elimination of personal exemptions. And as the new House of Representatives gets under way, I pledge to continue our work to reorient our economy towards middle class families and the working poor.”