Good
afternoon
folks
-
Iowans
sent
me
to
Congress
with
a
mission:
to
cut
reckless
spending
and
stop
government
inefficiencies.
That's
why
every
month,
I
give
out
the
Squeal
Award,
which
recognizes
a
Washington
expense,
program
or
concept
that
has
proven
to
be
wasteful
and
needs
to
go.
Squeal
Award:
Complicated
and
Erroneous
Foreign
Tax
Credits
"It's
too
complicated."
"It's
broken."
"There's
too
many
loopholes."
As
I
travel
across
Iowa,
those
are
just
a
few
of
the
frustrations folks have
with our
current
tax
system
-
and
they're
right.
Many
of
the
provisions
put
in
place burden
taxpayers
and
overwhelm the
Internal
Revenue
Service
(IRS)
to
the
point
that
erroneous
payments
and
returns
are
made
to
the tune
of
hundreds
of
millions
of
dollars.
For
a prime
example,
look
no
further
than the
Foreign
Tax
Credit
(FTC).
The
United
States
generally
taxes
individuals
based
on
citizenship
rather
than
residency,
therefore
American
citizens
who
are
working
abroad
have
to
pay
taxes
to
the
foreign
country
they
are
working
in,
as
well
as
U.S.
taxes
above
a
certain
wage
of
salary
exclusion.
For
those
Americans
paying
double
the
taxes
abroad
(U.S.
and
foreign),
the
Foreign
Tax
Credit
is
available
to
offset
their
overseas
tax
liability.
However,
a
2015
audit
by
the
U.S.
Treasury
Department
Inspector
General
for
Tax
Administration
found
that
this
tax
credit
is
not
working
the
way
it
was
intended
to,
and
the
oversight
for
compliance
is
dismal.
In
the
audit,
the
Treasury
Inspector
General
identified
that
the
IRS
fails
to
have
the
adequate
"controls
and
processes
in
place
to
identify
erroneous
FTC
claims".
Because
of
this,
between 2010-2012,
the
IRS
potentially mishandled nearly $100
million in
FTCs
due
to
improperly
filed
tax
returns,
nearly $2.9
million was claimed
both
as
a
deduction and a
credit,
and
allowed
nearly
$40
million
in
incorrect
FTCs
on more
than
188,000 tax
returns
when
third-party
information
return
documents didn’t
match the
FTCs
that
were
claimed.
The flawed
claims
and
mishandled
money
when
it
comes
to
FTCs
add to
the
pile
of
evidence
for
the great need
for
tax
reform.
We
must simplify
and
streamline
this
process
for U.S. citizens.
Due
to
the
failure
to
properly
monitor
claims
and
payments
under
the
Federal
Tax
Credit,
I
hereby
present
the
IRS
with
this
month’s
Squeal
Award.
Do
you
have
an
example
of
government
waste
or
inefficiencies
that
I
should
take
a
look
at?
Send
me
an
email
by clicking
here.
Thank
you!
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