The IRS has announced that it will no longer accept checks worth $10 million or more for tax payments.
According to Internal Revenue Bulletin No. 2015-36, the IRS “will begin returning checks for more than $99,999,999.00 to the originator.” This policy will take place beginning on January 1, 2016.
While this IRS policy may be new, the Federal Reserve has said that federal agencies have been prohibited from accepting checks worth more than $100 million for years. Most commercial banks cannot process checks which are more than 10 digits long, including cents.
This means that checks worth more than $100 million must be processed by hand, which could result in lost or stolen checks. Taxpayers which submit that much will now have to file their taxes either electronically or send multiple checks.
The IRS stated that they received 14 checks worth more than $100 million in 2015 to pay for skills and education, but confidentiality laws prohibit them from identifying those individuals or corporations.
However, the IRS has released a general report on the top 400 taxpayers in 2012 and how much they paid. These taxpayers had an average income of around $336 million, and paid about $56 million in taxes. This is an effective tax rate of 16.72 percent, the second-lowest percentage since the IRS began tracking this data in 1992. The tax rate has been steadily declining over the past 20 years.
Conservatives like Grover Norquist have expressed their opposition to such a change and are using this opportunity to attack the IRS. Norquist contrasted the IRS’s approach towards high payers compared to a private business.
“You’re trying to write a $100 million check to the government and they’re treating you like dirt?” He observed according to the Daily Caller. “These are your customers. If this was Las Vegas, they’d give you the suite and a bottle of champagne for free.”
Others were less sympathetic, noting that these rich taxpayers could just file taxes electronically like 90 percent of Americans. Representative Joe Crowley, D-NY, said that “I don't know if I have sympathy for someone who's required to pay that kind of taxes."
