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House Republicans plan tax fairness "summit"

WASHINGTON: Republicans in the House of Representatives said on Saturday that they would hold a "tax summit" to look for ways to replace a system they call burdensome and unfair and would prepare legislation to strengthen taxpayers' privacy.

In the weekly Republican radio address, Bill Archer, chairman of the House Ways and Means Committee, said the bill he would push would also help "level the playing field between taxpayers and the IRS" by eliminating taxes on interest payments that taxpayers get from the Internal Revenue Service.

The Texas representative, Congress' chief tax policy writer, said the three-day congressional "summit" would "look at the national sales tax, the flat tax and other ideas because we need to rip the current tax code out by its roots."

The meeting is to be held from April 11 to 13. Archer said his committee would start work next week on a "new taxpayer bill of rights" focused on ways to safeguard taxpayers from illegal disclosures of their personal information and from computer hackers.

He said the plan would require the IRS to notify taxpayers immediately if their tax information was obtained illegally by a third party. It would also deal with privacy abuses that occur when banks ask taxpayers to sign undated forms authorising release of information.

"In many cases, the forms don't even say who is to receive the information. We're going to shut down that practice once and for all," Archer said.

With the bill, he said, states that have access to federal tax information would have to conduct annual on-site system reviews to protect against illegal disclosures and computer hackers.

To put taxpayers on a more equal footing with the IRS, Archer said, the bill would change current law that barred taxpayers from deducting interest payments to the IRS but made them pay taxes on interest payments received from it.

"Under our plan, no tax can be charged on interest received from the IRS," he said.

Archer said the plan would also give taxpayers a way to stop cascading interest while they work out disputes with the tax agency and would waive penalty interest if the IRS made a mistake or caused unreasonable delay.-Reuters