Press Releases

WASHINGTON―Congressman Ron Estes (R-Kansas) and Congressman Brad Schneider (D-Illinois) introduced bipartisan legislation today to amend Section 965 of the tax code to ensure the Internal Revenue Service (IRS) follows congressional intent with regard to structured payments of corporate tax liabilities.

“This bipartisan legislation will ensure the IRS follows congressional intent by allowing companies to have the necessary cash flow to plan for the future and make structured payments on their tax liability,” said Rep. Estes. “Providing certainty and fairness in our tax code is key to growing our economy.”

“It is important that we project clarity and certainty with our tax code to ensure businesses can plan for the future and ultimately grow our economy and create jobs,” said Rep. Schneider. “The IRS interpretation of Section 965 has strayed far from the original congressional intent and created confusion. Our bipartisan legislation is a fix to correct this inconsistency and clarify the rules surrounding taxes on repatriated earnings.”

To mitigate the burden on taxpayers, Section 965 of the tax code allowed companies to pay a transition tax that was applied to its overseas earnings over an eight-year period. However, the IRS has disregarded the statue’s eight-year schedule and has forced taxpayers to apply tax refunds and overpayments toward their outstanding eight-year liability. The IRS has effectively penalized taxpayers who diligently worked to ensure they sufficiently paid their taxes to the federal government.

The IRS Taxpayer Advocate Service has publicly stated the need for an administrative fix to correct IRS implementation of Section 965 and the agency’s inconsistent guidance provided to taxpayers. In one blog post, National Taxpayer Advocate Nina E. Olson said the IRS was, “administering the provision in a way that seemingly runs contrary to congressional intent.”

An administrative fix to current tax law will ensure congressional intent is followed by reaffirming the eight-year schedule and divergent nature of tax liabilities.

Ron Estes is a 5th generation Kansan and represents Kansas’ 4th Congressional District in the U.S. House of Representatives. He serves on the House Committee on Ways and Means.