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Treasury Inspector General Issues Report Calling IRS Collection of Medical Device Tax Problematic

Tuesday, August 19, 2014  
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Treasury Inspector General Issues Report Calling IRS Collection of the Medical Device Tax Problematic

A report released by the Treasury Inspector General for Tax Administration (TIGTA) showed that collecting and estimating payments from device companies for the medical device excise tax is becoming increasingly problematic for the Internal Revenue Service (IRS). The purpose of the report by TIGTA was to review and asses the IRS’s processing of tax returns reporting the device tax and its efforts to identify taxpayer noncompliance. In addition to finding that the IRS is currently unable to identify the population of device manufacturers required to file a Form 720 to pay the tax, the report also found that the IRS mistakenly issued over 200 penalties totaling more than $700,000 against businesses filing Form 720s.

Many Members of Congress issued statements reiterating calls to repeal the device tax after the report’s release. Senator Orrin Hatch, Ranking Member on the Senate Finance Committee and chief cosponsor of bipartisan legislation to repeal the tax in the Senate, noted “As I have said all along – the only real way to fix this tax is to repeal it.” Erik Paulsen, chief cosponsor of bipartisan legislation to repeal the tax in the House of Representatives said, “The medical device tax has been a bad idea since day one and the recent report just provides more reason why it needs to be scrapped.”

MDMA continues to advocate for full repeal of this onerous, job-killing tax, and we will once again rely on your passionate engagement to push repeal across the finish line once and for all when Members of Congress return to Washington this fall and winter. To view the report, please click here.