United States Congress Joint Committee on Taxation
Encyclopedia
The Joint Committee on Taxation is a Committee of the U.S. Congress established under the Internal Revenue Code
at .
The Joint Committee is chaired on a rotating basis by the Chair of the Senate Finance Committee and the Chair of the House Ways and Means Committee. During the first Session of each Congress the House has the joint committee chair and the Senate has the vice-chair; during the second session the roles are reversed.
The Members of the Joint Committee choose the Chief of Staff of the Joint Committee, who is responsible for selecting the remainder of the staff on a nonpartisan basis. Since May 15, 2009, the Chief of Staff of the Joint Committee has been Thomas A. Barthold.
With respect to the estimation of revenues for Congress, the Joint Committee serves a purpose parallel to that of the Congressional Budget Office
for the estimation of spending for Congress, the Department of the Treasury
for the estimation of revenues for the executive branch
, and the Office of Management of Budget
for the estimation of spending for the executive branch.
. At the time, there were reports of inefficiency and waste in the Bureau and allegations that the method of making refunds created the opportunity for fraud. One of the issues investigated by the Select Committee was the valuation of oil properties. The Committee found that there appeared to be no system, no adherence to principle, and a total absence of competent supervision in the determination of oil property values.
In 1925, after making public charges that millions of tax dollars were being lost through the favorable treatment of large corporations by the Bureau, Senator Couzens was notified by the Bureau that he owed more than $10 million in back taxes. Then Treasury Secretary Andrew Mellon was believed to be personally responsible for the retaliation against Senator Couzens. At the time, Secretary Mellon was the principal owner of Gulf Oil
, which had benefited from rulings specifically criticized by Senator Couzens.
The investigations by the Senate Select Committee led, in the Revenue Act of 1926
, to the creation of the Joint Committee on Internal Revenue Taxation. The select committee emphasized
As originally conceived by the House, a temporary "Joint Commission on Taxation" was to be created to "investigate and report upon the operation, effects, and administration of the Federal system of income and other internal revenue taxes and upon any proposals or measures which in the judgment of the Commission may be employed to simplify or improve the operation or administration of such systems of taxes.....".(1)
The Senate expanded significantly the functions contemplated by the House and transformed the proposed Joint Commission to a Joint Committee with a permanent staff. The Senate version was incorporated into the Revenue Act of 1926 and the Joint Committee was created.(3)
The first Chief of Staff of the Joint Committee on Internal Revenue Taxation was L.H. Parker, who had been the chief investigator on Senator Couzens' Select Senate Committee. The Revenue Act of 1926 required the Joint Committee on Internal Revenue Taxation to publish from time to time for public examination and analysis proposed measures and methods for the simplification of internal revenue taxes and required the Joint Committee to provide a written report to the House and Senate by December 31, 1927, with such recommendations as it deemed advisable. The Joint Committee published its initial report on November 15, 1927, and made various recommendations to simplify the Federal tax system, including a recommendation for the restructuring of the Federal income tax title
.
In the Revenue Act of 1928
, the Joint Committee's authority was extended to the review of all refunds or credits of any income, war-profits, excess-profits, or estate or gift tax in excess of $75,000. In addition, the Act required the Joint Committee to make an annual report to the Congress with respect to such refunds and credits, including the names of all persons and corporations to whom amounts are credited or payments are made, together with the amounts credit or paid to each.
Since 1928, the threshold for review of large tax refund
s has been increased from $75,000 to $2 million in various steps and the taxes to which such review applies has been expanded. Other than that, the Joint Committee's responsibilities under the Internal Revenue Code
have remained essentially unchanged since 1928.
While the statutory mandate of the Joint Committee has not changed significantly, however, the tax legislative process has.
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
at .
Structure
The Joint Committee is composed of ten Members: five from the Senate Finance Committee and five from the House Ways and Means Committee.The Joint Committee is chaired on a rotating basis by the Chair of the Senate Finance Committee and the Chair of the House Ways and Means Committee. During the first Session of each Congress the House has the joint committee chair and the Senate has the vice-chair; during the second session the roles are reversed.
The Members of the Joint Committee choose the Chief of Staff of the Joint Committee, who is responsible for selecting the remainder of the staff on a nonpartisan basis. Since May 15, 2009, the Chief of Staff of the Joint Committee has been Thomas A. Barthold.
Duties
The duties of the Joint Committee are:- Investigating the operation, effects, and administration of internal revenue taxes
- Investigate measures and methods for the simplification of taxes
- Make reports on the results of those investigations and studies and make recommendations
- Review any proposed refund or credit of taxes in excess of $2,000,000.
With respect to the estimation of revenues for Congress, the Joint Committee serves a purpose parallel to that of the Congressional Budget Office
Congressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
for the estimation of spending for Congress, the Department of the Treasury
United States Department of the Treasury
The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...
for the estimation of revenues for the executive branch
Executive (government)
Executive branch of Government is the part of government that has sole authority and responsibility for the daily administration of the state bureaucracy. The division of power into separate branches of government is central to the idea of the separation of powers.In many countries, the term...
, and the Office of Management of Budget
United States Office of Management and Budget
The Office of Management and Budget is a Cabinet-level office, and is the largest office within the Executive Office of the President of the United States .The current OMB Director is Jacob Lew.-History:...
for the estimation of spending for the executive branch.
History
In 1924, Senator James Couzens (Michigan) introduced a resolution in the Senate for the creation of a Select Committee to investigate the Bureau of Internal RevenueBureau of Internal Revenue
Bureau of Internal Revenue may refer to:*Bureau of Internal Revenue, in the Philippines*former name of the Internal Revenue Service in the United States...
. At the time, there were reports of inefficiency and waste in the Bureau and allegations that the method of making refunds created the opportunity for fraud. One of the issues investigated by the Select Committee was the valuation of oil properties. The Committee found that there appeared to be no system, no adherence to principle, and a total absence of competent supervision in the determination of oil property values.
In 1925, after making public charges that millions of tax dollars were being lost through the favorable treatment of large corporations by the Bureau, Senator Couzens was notified by the Bureau that he owed more than $10 million in back taxes. Then Treasury Secretary Andrew Mellon was believed to be personally responsible for the retaliation against Senator Couzens. At the time, Secretary Mellon was the principal owner of Gulf Oil
Gulf Oil
Gulf Oil was a major global oil company from the 1900s to the 1980s. The eighth-largest American manufacturing company in 1941 and the ninth-largest in 1979, Gulf Oil was one of the so-called Seven Sisters oil companies...
, which had benefited from rulings specifically criticized by Senator Couzens.
The investigations by the Senate Select Committee led, in the Revenue Act of 1926
Revenue Act of 1926
The United States Revenue Act of 1926, , reduced inheritance and personal income taxes, cancelled many excise imposts, and ended public access to federal income tax returns.Passed by the 69th Congress, it was signed into law by President Calvin Coolidge....
, to the creation of the Joint Committee on Internal Revenue Taxation. The select committee emphasized
- the need for the institution of a procedure by which the Congress could be better advised as to the systems and methods employed in the administration of the internal revenue laws with a view to the needs for legislation in the future, simplification and clarification of administration, and generally a closer understanding of the detailed problems with which both the taxpayer and the Bureau of Internal Revenue are confronted. It is more properly the function of the Senate Finance Committee and the House Ways and Means Committee, jointly, to engage in such an activity.(2)
As originally conceived by the House, a temporary "Joint Commission on Taxation" was to be created to "investigate and report upon the operation, effects, and administration of the Federal system of income and other internal revenue taxes and upon any proposals or measures which in the judgment of the Commission may be employed to simplify or improve the operation or administration of such systems of taxes.....".(1)
The Senate expanded significantly the functions contemplated by the House and transformed the proposed Joint Commission to a Joint Committee with a permanent staff. The Senate version was incorporated into the Revenue Act of 1926 and the Joint Committee was created.(3)
The first Chief of Staff of the Joint Committee on Internal Revenue Taxation was L.H. Parker, who had been the chief investigator on Senator Couzens' Select Senate Committee. The Revenue Act of 1926 required the Joint Committee on Internal Revenue Taxation to publish from time to time for public examination and analysis proposed measures and methods for the simplification of internal revenue taxes and required the Joint Committee to provide a written report to the House and Senate by December 31, 1927, with such recommendations as it deemed advisable. The Joint Committee published its initial report on November 15, 1927, and made various recommendations to simplify the Federal tax system, including a recommendation for the restructuring of the Federal income tax title
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
.
In the Revenue Act of 1928
Revenue Act of 1928
The Revenue Act of 1928 , formerly codified in part at 26 U.S.C. sec. 22, is a statute enacted by the 70th United States Congress in 1928 regarding tax policy....
, the Joint Committee's authority was extended to the review of all refunds or credits of any income, war-profits, excess-profits, or estate or gift tax in excess of $75,000. In addition, the Act required the Joint Committee to make an annual report to the Congress with respect to such refunds and credits, including the names of all persons and corporations to whom amounts are credited or payments are made, together with the amounts credit or paid to each.
Since 1928, the threshold for review of large tax refund
Tax refund
A tax refund or tax rebate is a refund on taxes when the tax liability is less than the taxes paid. Taxpayers can often get a tax refund on their income tax if the tax they owe is less than the sum of the total amount of the withholding taxes and estimated taxes that they paid, plus the...
s has been increased from $75,000 to $2 million in various steps and the taxes to which such review applies has been expanded. Other than that, the Joint Committee's responsibilities under the Internal Revenue Code
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
have remained essentially unchanged since 1928.
While the statutory mandate of the Joint Committee has not changed significantly, however, the tax legislative process has.
Members, 112th Congress
| Majority | Minority | |
|---|---|---|
| Senate members |
|
Orrin Hatch Orrin Grant Hatch is the senior United States Senator for Utah and is a member of the Republican Party. Hatch served as the chairman or ranking member of the Senate Judiciary Committee from 1993 to 2005... , Utah Chuck Grassley Charles Ernest "Chuck" Grassley is the senior United States Senator from Iowa . A member of Republican Party, he previously served in the served in the United States House of Representatives and the Iowa state legislature... , Iowa |
| House members |
Wally Herger Walter William "Wally" Herger, Jr. , American politician, has been a Republican member of the United States House of Representatives since 1987, representing the California's 2nd congressional district. The second district is physically large... , California Sam Johnson Samuel Robert "Sam" Johnson is an American politician and a retired career U.S. Air Force officer and fighter pilot. He currently is a Republican member of the U.S. House of Representatives from the 3rd District of Texas... , Texas |
Sander M. Levin Sander Martin Levin, generally known as Sandy Levin, is the U.S. Representative for , serving since 1983, and the ranking Democrat on the House Ways and Means Committee... , Michigan Charles B. Rangel Charles Bernard "Charlie" Rangel is the U.S. Representative for , serving since 1971. A member of the Democratic Party, he is the third-longest currently serving member of the House of Representatives. As its most senior member, he is also the Dean of New York's congressional delegation... , New York |