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Thursday, January 29, 2009

"Rangel Rule" Would Exempt All Taxpayers From IRS Penalties and Interest

Rangel Rule

Congressman John Carter (R-TX) yesterday introduced H.R. 735, The Rangel Rule Act of 2009, which would add new Code § 7529 to prohibit the IRS from charging penalties and interest on back taxes.  From the press release:

Under the proposed law, any taxpayer who wrote “Rangel Rule” on their return when paying back taxes would be immune from penalties and interest.

“We must show the American people that Congress is following the same law, and the same legal process as we expect them to follow,” says Carter. “That has not been done in the ongoing case against Chairman Rangel, nor in the instance of our new Treasury Secretary Timothy Geithner. If we don’t hold our highest elected officials to the same standards as regular working folks, we owe it to our constituents to change those standards so everyone is abiding by the same law. Americans believe in blind justice, which shows no favoritism to the wealthy or powerful.”

Carter also said the tax law change will provide good economic stimulus benefits, as it would free many taxpayers from massive debts to the IRS, restoring those funds to the free market to help create jobs.

Here is the text of proposed new § 7529:

Any individual who is a citizen of the United States and who writes 'Rangel Rule' on the top of the first page of the return of tax imposed by chapter 1 for any taxable year shall be exempt from any requirement to pay interest, and from any penalty, addition to tax, or additional amount, with respect to such return.

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Comments

Let us know when this passes....

Posted by: joe blow | Jan 29, 2009 6:25:11 PM

Isn't there something in the Code about a $5000 penalty for the introduction of frivolous legislation?

Posted by: Peter G | Jan 30, 2009 12:07:36 AM

It's so sad. The Repbulican Party used to be the party of law and order. Now it is just the party of nothing.

Posted by: Peter | Jan 30, 2009 8:50:46 AM

Excellent. I hope it passes - fat chance.

Posted by: Steve Odem | Jan 30, 2009 9:17:55 AM

I thought Geithner paid the penalties. I definitely remember reading that he paid the interest. Was Rangel's case different, or does this idea simply have no reference to reality?

Posted by: Michael | Jan 30, 2009 9:53:09 AM

Too funny!

However, a thorough reading of "Cracking the Code" (www.losthorizons.com) reveals that most people are not subject to the tax imposed by chapter 1 in the first place and that a full refund of ALL monies withheld during any "taxable year" can be obtained as well as relief from any accumulated penalties and interest. Check it out.

Posted by: sam | Jan 30, 2009 10:10:23 AM

This sort of reminds me of "O-Doyle Rules" from the Adam Sandler movie.

Posted by: Paul Rudolph | Jan 30, 2009 11:02:30 AM

The proposal is likely simply to favor people who know about it; that is not most taxpayers. It would be simpler to just get rid of interest / penalty requirements.

Also, I may be wrong, but this new statute appears to apply to all tax returns, not just those dealing with back taxes.

Posted by: incomeplete | Jan 30, 2009 1:04:19 PM

It will never pass but, it should put congress and any other person who has some sort of political aspirations on notice that no one is exempt from accurately paying taxes.

Posted by: Phil | Jan 31, 2009 8:13:35 AM

Riiiiiight Phil....and on top of that whoever mentioned the Republican "models" are deluding themselves, "by paying your taxes you can get away with criminal acts, including violating the US constitution"?!

If elected officials receive any type of leniency on tax errors then so should the common folk.

Let's not repeat history and violate people's rights with obviously biased tax laws. We wouldn't want to go back to being the divided states of America.

Posted by: Matt | Jan 31, 2009 11:01:09 PM

You are kidding me! Although I am an independent I don't how any of you can make a NEGATIVE comment about helping people with Tax relief.

Then there is those of you that have such an agenda and make ignorant statements without any research or fact checks.Both Rangel and Daschle paid NO penalty. Rangels non-payment on his taxes goes back for years. Timothy Geithner who is the head of the Treasury Dept. avoided paying his taxes and only when he was up for his new position did he pay back his Taxes and interest...NO penalty.
If it was you or me you would be hit with a penalty, interest, and the back taxes. Wake up !!! It's not a party thing.

Posted by: Stu Zucker | Feb 2, 2009 1:29:20 AM