THRIFT SAVINGS FUND CLARIFICATION ACT
(House of Representatives - July 31, 2012)

Text available as:

Formatting necessary for an accurate reading of this text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.

        

[Pages H5410-H5411]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THRIFT SAVINGS FUND CLARIFICATION ACT

  Mr. CHAFFETZ. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4365) to amend title 5, United States Code, to make clear 
that accounts in the Thrift Savings Fund are subject to certain Federal 
tax levies, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4365

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AMENDMENTS.

       Section 8437(e)(3) of title 5, United States Code, is 
     amended in the first sentence--
       (1) by striking ``659)'' and inserting ``659),''; and
       (2) by striking the period at the end and inserting the 
     following: ``, and shall be subject to a Federal tax levy 
     under section 6331 of the Internal Revenue Code of 1986.''.

     SEC. 2. DISPOSITION OF AMOUNTS.

       Any potential revenue gain attributable to the enactment of 
     this Act, as determined by the Director of the Congressional 
     Budget Office--
       (1) shall be deposited in the general fund of the Treasury 
     of the United States; and
       (2) shall be used solely for purposes of deficit reduction. 


  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Utah (Mr. Chaffetz) and the gentlewoman from New York (Mrs. Maloney) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Utah.


                             General Leave

  Mr. CHAFFETZ. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous materials on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Utah?
  There was no objection.
  Mr. CHAFFETZ. I yield such time as she may consume to the gentlewoman 
from New York (Ms. Buerkle), the prime sponsor and author of this piece 
of legislation.
  Ms. BUERKLE. Mr. Speaker, I thank the gentleman for yielding to me, 
and I rise today in support of my legislation, H.R. 4365, which would 
make Thrift Savings Plans subject to Federal tax levies. Currently, TSP 
accounts are not listed in the IRS Code provisions identifying property 
that is exempt from tax. This bill makes clear that the TSP accounts 
are to be treated the same as 401(k)s and similar retirement and 
savings accounts held by private sector employees.
  This bill is about fairness, Mr. Speaker. It will treat Federal 
employees the same as private sector employees.
  H.R. 4365 adds needed clarification to existing law and provides 
guidance to the Thrift Board on how to honor IRS levies as they arise. 
In 2010, the Office of Legal Counsel at the Department of Justice 
concluded that TSPs are subject to levy. And last week, the Federal 
Retirement Thrift Investment Board, which oversees TSP accounts, wrote 
Congress asking that this issue be clarified expeditiously, noting that 
the lack of clarity is causing significant operational issues.
  At the end of 2010, Mr. Speaker, the most recent year for which IRS 
data is available, 279,000 Federal employees owed $3.4 billion in 
Federal taxes. And the Joint Committee on Taxation estimates that 
enacting this legislation would increase revenues by $24 million over 
the 2012-2022 period.
  Mr. Speaker, $24 million may seem like a small figure to some inside 
the Beltway. However, I believe any savings Congress can produce in 
today's fiscal environment is significant.
  This is a commonsense solution which received bipartisan support in 
the House Oversight and Government Reform Committee. Similar 
legislation also received overwhelming support in the Senate. I urge 
passage of this bill.
  Mrs. MALONEY. Mr. Speaker, I yield myself such time as I may consume.

[[Page H5411]]

  Mr. Speaker, as a member of the Committee on Oversight and Government 
Reform, I am pleased to join my colleagues in the consideration of H.R. 
4365, a bill to amend title 5, United States Code, to make clear that 
accounts in the Thrift Savings Fund are subject to Federal tax levies.
  Current law authorizes the Internal Revenue Service to levy private 
sector 401(k) retirement plans in order to collect unpaid Federal 
taxes.

                              {time}  1550

  However, due to an existing ambiguity between the Internal Revenue 
Code and the authorizing statute for the Federal Thrift Savings Plan, 
the IRS is unable to garnish TSP accounts to recover unpaid taxes from 
Federal employees and Members of Congress. In light of this statutory 
confusion, the Thrift Savings Plan's executive director requested 
clarification from our committee back in July of 2011 as to whether the 
TSP should honor Federal levies on TSP accounts.
  H.R. 4365 would simply ensure that Federal TSP accounts and private 
sector 401(k) plans receive equal treatment in the area of tax 
administration and enforcement by amending the TSP authorizing statute 
to make clear that TSP fund accounts are, in fact, subject to Federal 
tax levies by the IRS. In addition, pursuant to an amendment offered by 
our distinguished ranking member, Mr. Cummings of Maryland, and 
included in the bill as reported by our committee, any potential 
revenue derived from the enactment of H.R. 4365 may be used only for 
the purposes of deficit reduction.
  In supporting this bill, I would note that the vast majority of our 
public servants pay their taxes in a responsible and timely manner. In 
fact, according to the most recent IRS statistics, the tax delinquency 
rate among Federal employees in 2010 was 3.33 percent, far lower than 
that of the general public.
  Mr. Speaker, I urge my colleagues on both sides of the aisle to 
support this reasonable legislation, and I yield back the balance of my 
time.
  Mr. CHAFFETZ. Mr. Speaker, this is a good, commonsense piece of 
legislation, and I urge its adoption.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Utah (Mr. Chaffetz) that the House suspend the rules and 
pass the bill, H.R. 4365, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mrs. MALONEY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

                          ____________________