Thom Tillis Makes The Case To Trump's IRS Nom For Ending COVID-Era Employee Retention Tax Credit

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During a Senate Finance Committee hearing last week, Sen. Thom Tillis (R-NC) spoke about the Employee Retention Tax Credit.

Transcript

00:00Thank you, Mr. Chair. Mr. Long, thank you for being here. Congratulations on your nomination.

00:08A question that I have relates to the Employee Retention Tax Credit. You and I talked about a

00:13little bit about this in the office. Thank you for the amount of time you spent in there. I

00:17intend to support your confirmation. I hate the Employee Retention Tax Credit because it's been

00:25abused. It's been abused so much that we have come up with this construct of a fake pay-for

00:33on tax bills where the recovery of fraudulent claims will be used to offset future tax policy.

00:43The problem with that is that we passed this bill when we thought that this economy was going to go

00:51into the tank because of COVID. So we passed this bill and a number of other bills, which is raised

00:56spending levels that we're trying to get under control now, to actually try to help people that

01:01were really struggling. But what we found now is that some people didn't need it. Some people are

01:06applying for it way after the fact, and it makes no sense to me. So I know there's already in the

01:13House bill, I think there's a three and a half trillion or billion dollar recovery of fraudulent

01:19claims as a pay-for for future tax policy. I actually believe that we should end this.

01:25My question for you, do you think we should end the Employee Retention Tax Credit? And whatever

01:32savings or fraudulent applications we identify, should they go back to the Treasury where they

01:38came? The, according to my understanding, and as you know, we voted on it under Trump and then redid

01:48it under Biden with several amendments, but the Taxpayer Advocate Service that we had a discussion

01:54on earlier said this was the number one problem. And to my way, unless you know something about

02:02the, I don't know, it ended April 15th of this year. Well, what we're talking about doing is going

02:07back to January of 24 and saying those claims are, we're not going to fill those claims. So we're

02:14talking about going back retroactively. Some have been filled by now. We're talking, I've got to work

02:20through the fairness of clawing some of that back, but I've been trying to kill this turkey for two or

02:25three years now. And I believe that we need to stick a fork in it. And I believe that if money

02:32has not gone out the door, then it need not go out the door. I'm just for the life of me trying

02:37to figure out how in the hell could somebody, if the whole idea of the COVID relief policy was

02:43fiscal conservatives like me were saying, look, I'm not going to, I'm not going to question things

02:49when we're in the middle of a global pandemic and on the brink of a global fiscal crisis. So that's,

02:54that's when you kind of have to set the perfect aside and try to do what we can to stabilize it.

02:59And there's no question that Congress did that, but this just looks to me like I want to, I want

03:05to stick a fork in it. I want to end it. It looks like the house bill has the claims back to 2024

03:11that haven't been played out or potentially call, call them back. Do you have any concerns with that

03:16proposed policy out of the house? It, I have concerns about being fair and it depends on if what we

03:24voted on in Congress, if people followed the letter of the law, dotted the I's, crossed the T's. And

03:29of course, you know, they suspended paying anybody September 14th of 2023. And so people that were,

03:38you know, in line before that or already had their paperwork in, some of those people I know still

03:43haven't. Yeah. Well, I want to get to one other, I want to get to one other question. I can't tell you

03:50how many people I talked to in North Carolina who were suffering businesses who said, you know what,

03:55I'm just not going to, I think I can make do, but I'm not going to file for the employer retention

04:00tax credit because I think I can get it done. I think there were some other people going, hell,

04:04there's a pot of money out here and I'm qualified for it. So even though I may not need it, I'm going

04:09to try and get it. There's a side of me that says that's what you ought to do if you got a good tax

04:14lawyer. There's another side of me that said this was a program that was implemented in the middle of a

04:20global pandemic when tens of thousands of Americans were dying. And it just seems to me

04:26that a good well-run business could have looked at that and said, you know what, I'm not going to dig

04:31a deeper hole for this deficit because I can make my business work. Now, to be honest, if they're

04:38following the law, they should probably get it because we passed the bill. But there's some folks

04:42out there, I'm going, guys, you didn't need it. The nature of your business was not one that you

04:46need it. The lawyer's got you a good credit and good on you. But that's passed. I'm not going to go

04:54way back before 2024. But I cannot imagine if a business has the resources where they can retain

05:01an attorney and try and get that tax dollars now, they probably weren't in much trouble.

05:07And what we were trying to do was help those that were desperate. So I feel like there was some abuse

05:11there. And I believe that the house mark is a good one. I was going to ask you a direct filing

05:16program. I hope you're okay with us killing that. We should have never had it. There are free filing

05:20programs out there. Direct file needs to go away. I think that that's in the house mark. That is good

05:25news. And I wanted to talk to you about some of my concerns with the president's priorities on

05:30non-pro-growth tax policy, but I'll just submit them for the record. Thank you.

05:33Okay. And I never did get my wife that sandwich.

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