[Congressional Record Volume 158, Number 115 (Tuesday, July 31, 2012)]
[House]
[Pages H5410-H5411]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THRIFT SAVINGS FUND CLARIFICATION ACT
Mr. CHAFFETZ. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4365) to amend title 5, United States Code, to make clear
that accounts in the Thrift Savings Fund are subject to certain Federal
tax levies, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4365
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AMENDMENTS.
Section 8437(e)(3) of title 5, United States Code, is
amended in the first sentence--
(1) by striking ``659)'' and inserting ``659),''; and
(2) by striking the period at the end and inserting the
following: ``, and shall be subject to a Federal tax levy
under section 6331 of the Internal Revenue Code of 1986.''.
SEC. 2. DISPOSITION OF AMOUNTS.
Any potential revenue gain attributable to the enactment of
this Act, as determined by the Director of the Congressional
Budget Office--
(1) shall be deposited in the general fund of the Treasury
of the United States; and
(2) shall be used solely for purposes of deficit reduction.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Utah (Mr. Chaffetz) and the gentlewoman from New York (Mrs. Maloney)
each will control 20 minutes.
The Chair recognizes the gentleman from Utah.
General Leave
Mr. CHAFFETZ. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous materials on the bill under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Utah?
There was no objection.
Mr. CHAFFETZ. I yield such time as she may consume to the gentlewoman
from New York (Ms. Buerkle), the prime sponsor and author of this piece
of legislation.
Ms. BUERKLE. Mr. Speaker, I thank the gentleman for yielding to me,
and I rise today in support of my legislation, H.R. 4365, which would
make Thrift Savings Plans subject to Federal tax levies. Currently, TSP
accounts are not listed in the IRS Code provisions identifying property
that is exempt from tax. This bill makes clear that the TSP accounts
are to be treated the same as 401(k)s and similar retirement and
savings accounts held by private sector employees.
This bill is about fairness, Mr. Speaker. It will treat Federal
employees the same as private sector employees.
H.R. 4365 adds needed clarification to existing law and provides
guidance to the Thrift Board on how to honor IRS levies as they arise.
In 2010, the Office of Legal Counsel at the Department of Justice
concluded that TSPs are subject to levy. And last week, the Federal
Retirement Thrift Investment Board, which oversees TSP accounts, wrote
Congress asking that this issue be clarified expeditiously, noting that
the lack of clarity is causing significant operational issues.
At the end of 2010, Mr. Speaker, the most recent year for which IRS
data is available, 279,000 Federal employees owed $3.4 billion in
Federal taxes. And the Joint Committee on Taxation estimates that
enacting this legislation would increase revenues by $24 million over
the 2012-2022 period.
Mr. Speaker, $24 million may seem like a small figure to some inside
the Beltway. However, I believe any savings Congress can produce in
today's fiscal environment is significant.
This is a commonsense solution which received bipartisan support in
the House Oversight and Government Reform Committee. Similar
legislation also received overwhelming support in the Senate. I urge
passage of this bill.
Mrs. MALONEY. Mr. Speaker, I yield myself such time as I may consume.
[[Page H5411]]
Mr. Speaker, as a member of the Committee on Oversight and Government
Reform, I am pleased to join my colleagues in the consideration of H.R.
4365, a bill to amend title 5, United States Code, to make clear that
accounts in the Thrift Savings Fund are subject to Federal tax levies.
Current law authorizes the Internal Revenue Service to levy private
sector 401(k) retirement plans in order to collect unpaid Federal
taxes.
{time} 1550
However, due to an existing ambiguity between the Internal Revenue
Code and the authorizing statute for the Federal Thrift Savings Plan,
the IRS is unable to garnish TSP accounts to recover unpaid taxes from
Federal employees and Members of Congress. In light of this statutory
confusion, the Thrift Savings Plan's executive director requested
clarification from our committee back in July of 2011 as to whether the
TSP should honor Federal levies on TSP accounts.
H.R. 4365 would simply ensure that Federal TSP accounts and private
sector 401(k) plans receive equal treatment in the area of tax
administration and enforcement by amending the TSP authorizing statute
to make clear that TSP fund accounts are, in fact, subject to Federal
tax levies by the IRS. In addition, pursuant to an amendment offered by
our distinguished ranking member, Mr. Cummings of Maryland, and
included in the bill as reported by our committee, any potential
revenue derived from the enactment of H.R. 4365 may be used only for
the purposes of deficit reduction.
In supporting this bill, I would note that the vast majority of our
public servants pay their taxes in a responsible and timely manner. In
fact, according to the most recent IRS statistics, the tax delinquency
rate among Federal employees in 2010 was 3.33 percent, far lower than
that of the general public.
Mr. Speaker, I urge my colleagues on both sides of the aisle to
support this reasonable legislation, and I yield back the balance of my
time.
Mr. CHAFFETZ. Mr. Speaker, this is a good, commonsense piece of
legislation, and I urge its adoption.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Utah (Mr. Chaffetz) that the House suspend the rules and
pass the bill, H.R. 4365, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mrs. MALONEY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
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