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Here's something I did not know until this week - every large federal income tax refund has to be reviewed by a little-known congressional committee. According to The New York Times, that includes President Trump's $73 million tax refund, which has been under review by this committee for nine years now. Jacob Goldstein from our Planet Money podcast explains.
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JACOB GOLDSTEIN: The committee has called the Joint Committee on Taxation, and it's not a normal congressional committee - doesn't write laws or hold hearings. Dave Noren is a corporate lawyer who used to work on the committee.
DAVID NOREN: The Joint Committee Staff is a nonpartisan expert staff of economists, lawyers, accountants.
GOLDSTEIN: Mostly, the people who work at the committee to figure out what different tweaks to the tax code would mean for the government and the economy. But a few of them go into work every day and review giant tax refunds the IRS is sending out.
It's interesting because it's so one by one, right? I guess you don't think of Congress as doing anything on, like, we're going to look at every big tax refund that goes out in America, but that is what they're doing here.
NOREN: I agree. It is pretty unusual. It might be unique in terms of something that the Congress would get involved with.
GOLDSTEIN: Congress got involved with this back in the 1920s, basically because they didn't trust the person who was overseeing the IRS - the Treasury secretary, Andrew Mellon. Mellon was one of the richest men in America, also one of the biggest taxpayers in America, had all these business interests. And so Congress was like, wait, you owe all these taxes and have investments in all these businesses and you're the boss of the IRS. That seems shady. So Congress passed a law requiring the joint committee to review big refunds, and that congressional review still goes on today.
Do you feel like it's useful?
NOREN: I do. I do. The taxpayer gets huge bang for the buck out of the process. It costs almost nothing to run. It's just a few people. And they can be counted upon to spot millions and millions and millions of dollars of, you know, potential mistakes.
GOLDSTEIN: The committee reviews hundreds of these refunds a year. And in 2011, according to The New York Times, it started a review of a $73 million refund for Donald Trump. Noren says if it were a routine case, the review would have been resolved by the committee a long time ago.
NOREN: Typically, the joint committee clears refund reviews in about three weeks, maybe a little bit more than three weeks, in a standard, run-of-the-mill case.
GOLDSTEIN: Some really complicated cases might take a few months to figure out, but the president's case is still unresolved. And it went to the committee nine years ago - years. Noren never saw anything like that when he worked at the committee.
NOREN: I never saw years happen.
GOLDSTEIN: OK. So a case that went on for years would be very unusual in your experience.
NOREN: That's fair to say. Yes.
GOLDSTEIN: Then again, Noren says, during his time on the committee, he never reviewed a tax refund for a sitting president. Jacob Goldstein, NPR News.
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