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Baucus, Hatch, Camp, Levin Call on IRS to Ensure an Orderly Reinstatement of FAA Taxes

August 05, 2011

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah), with House Ways and Means Chairman Dave Camp (R-Mich.) and Ranking Member Sander Levin (D-Mich.) urged the IRS, in a letter yesterday, to appropriately use its discretion and authority as it administers the reinstatement of Federal Aviation Administration (FAA) taxes, now that a bill has been passed to extend the authorization to collect certain taxes, such as on airline tickets and freight.  When the FAA temporarily shut down some operations in July, the IRS stopped collecting the ticket taxes, which are used to finance industry infrastructure projects like airport repairs and safety upgrades.  The IRS would normally be required to collect the lost revenue once the FAA resumes normal functions, but the Finance and Ways and Means leaders, whose committees have jurisdiction over tax policy, asked that the IRS concentrate on restarting its FAA tax collection systems and processes going forward, rather than collecting ticket taxes retroactively.

“We are concerned about the impact on consumers and the aviation industry if these taxes are collected retroactively,” the Committee leaders wrote to IRS Commissioner Shulman.  “Furthermore, we understand that the IRS has limited resources—some of which will be required to restart systems and processes to begin collecting these taxes again going forward—and that the retroactive collection of trust fund taxes would add further strain to those resources.  Therefore, we encourage you to utilize all your discretion and authority to extend relief for passengers and airlines with respect to ticket taxes that were not paid or collected because of the lapse and provide the industry a three day period of time to restart processes to collect the taxes.”

The full text of the letter can be found here.