Dems concerned Trump officials may pressure IRS on withholdings

The top Democrats on Congress’s tax-writing committees are concerned the Trump administration may pressure the IRS to produce withholding tables that would benefit Republicans politically but ultimately cause people to owe taxes next year.

In a letter to acting IRS Commissioner David Kautter on Monday, Sen. Ron Wyden (D-Ore.) and Rep. Richard Neal (D-Mass.) said they are worried that the Treasury Department “may unduly influence the new withholding tables for the 2018 tax year in a manner that will result in millions of taxpayers receiving larger after-tax paychecks this election year but ultimately owing federal income tax when they file in 2019.”

The IRS is expected to release guidance this month on tax withholdings from employee’s paychecks that reflect the new tax law President Trump signed last month.

Republicans have said that the new tax-cut law will become more popular with the public once withholding tables are adjusted and people see greater take-home pay. GOP lawmakers and administration officials are hoping that the tax cuts will give Republicans a boost in November’s midterm elections.

Wyden and Neal said they don’t want Treasury to push the IRS to release withholding tables that take out an insufficient amount of taxes. In addition to serving as acting IRS commissioner, Kautter is the assistant secretary for tax policy at Treasury.

If taxes are not sufficiently withheld, people may get the appearance this year that they received a large tax cut, but will have to pay money to the IRS next year, the lawmakers said.

“For many families, IRS tables that withhold too little in taxes during the year present a considerable problem and undue hardship,” Wyden and Neal wrote.

Neal and Wyden asked the IRS to provide them with information by Jan. 12 about Treasury Department officials’ review of the forthcoming withholding tables.

The Democrats also sent a letter to the Government Accountability Office, asking that agency to review the withholding tables to ensure they are adequate.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said he was confident that the IRS would produce timely, accurate withholding tables.

“I think the bottom line here is Democrats so object to Americans keeping more of what they earn at work, they’ll do and say just about anything to cast doubt on it,” he told reporters Monday.

— updated at 4:28 p.m.