Senate Democrats launch probe into Trump IRS nominee

Democratic senators launched an inquiry Wednesday into President-elect Trump’s nominee for IRS commissioner, former Rep. Billy Long (R-Mo.).

They want to know how he went about promoting a pandemic-era tax credit, called the employee retention tax credit (ERTC), that has been riddled with fraudulent claims and gunked up IRS operations.

Senate Finance Committee Chair Ron Wyden (D-Ore.) and Sen. Catherine Cortez Masto (D-Nev.) sent letters to tax advisory firms that “reportedly paid Long on a contingency basis for ERTC refunds received by clients he referred.”

The letters went to the heads of Lifetime Advisors in Wisconsin and Commerce Terrace Consulting in Missouri. They have until Jan. 2 to respond to 15 questions about their promotion of the ERTC and Long’s role in hawking it.

“During a podcast interview last year, Long stated that there were many situations where a CPA would not sign off on a client’s ERTC claims but allegedly told them to ‘Go back to Billy. Let Billy do it for you,’” the letters to the CEO say.

The IRS has been up in arms over the promotion of the ERTC, which officials have described as providing a “gold rush” for promoters at the public expense.

“Last year, promoters intensified their marketing, bombarding the airwaves with ads. … You couldn’t turn on the TV or radio without coming across an [ERTC] ad. … The program turned into a gold rush for promoters,” IRS Commissioner Danny Werfel told reporters in June.

House lawmakers in both parties voted to do away with the credit as part of a broader tax bill that failed to make it to the Senate earlier this year.

That bill would have beefed up the child tax credit and reinstated breaks for businesses including bonus depreciation, interest deductibility and research and development, but Republicans voted it down in the Senate ahead of the election.

The IRS has become a flashpoint for what many see as increasing polarization among Democrats and Republicans.

Frequently, IRS commissioners are permitted to serve throughout the administrations of different parties as civil administrators, but Long’s nomination by President-elect Trump means Werfel likely will be fired.

Democrats’ original $80 billion funding boost for the IRS, the bulk of which was meant for enforcement and increased auditing of wealthy people and businesses, received fierce opposition from Republicans over the course of the Biden administration.

Republicans managed to claw back $21 billion of that additional funding during appropriations battles and have frozen an additional $20.2 billion, effectively reducing the amped enforcement budget by more than 90 percent.

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