‘Rangel Rule’ would nix penalties and interest on back taxes

January 31, 2009

So much for a "new" post-election Washington.

When the House approved its stimulus bill last week, not a single Republican voted for it. Over on the Senate side, a measure to provide medical coverage to 7 million children from poor families was approved on a party-line vote.

But such partisan posturing isn't limited to votes. Some members of Congress are getting their political licks in simply by introducing legislation.

Last week, Rep. John Carter (R-Texas) dropped H.R. 735, The Rangel Rule Act of 2009, into the hopper. It which would add a new section to the tax code that would prohibit the IRS from charging penalties and interest on back taxes.

Rangel rule form notation

To get this exemption, all a taxpayer would have to do is write "Rangel Rule" on the first page of his or her tax return.

Dubious honor: Carter named the bill in "honor" of House Ways and Means Chairman Charles Rangel (D-NY). The man who heads Congress' tax-writing panel last year revealed that he owed around $5,000 in federal back taxes on rental-home income he failed to report. Rangel
reportedly paid his back taxes, but not any
IRS penalties.

Rangel isn't the only Democrat targeted by Carter. In announcing H.R. 735, Carter also referenced the self-employment tax troubles of new Treasury Secretary Timothy Geithner.

"We must show the American people that Congress is following the same law, and the same legal process as we expect them to follow," said Carter in a press release. "That has not been done in the ongoing case against Chairman Rangel, nor in the instance of our new Treasury Secretary Timothy Geithner. If we don't hold our highest elected officials to the same standards as regular working folks, we owe it to our constituents to change those standards so everyone is abiding by the same law. Americans believe in blind justice, which shows no favoritism to the wealthy or powerful."

If Carter had waited a bit longer, he could have dropped Health and Human Services secretary nominee Tom Daschle's name, too. Daschle recently ponied up more than $100,000 in back taxes in connection with an employer-provided auto benefit.

Good reason, wrong motive: Personally, I think Carter, whose 31st District is just north of my Austin home, is being a bit heavy-handed and a tad disingenuous.

Would he have introduced H.R. 735 (and dubbed it after a colleague) if Republicans were on the tax hot seat right now? I doubt it.

But I do agree with my fellow Texan that the tax laws should be applied, fairly and evenly, to every taxpayer, in Washington, D.C., and beyond.

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
Added summer income means more tax considerations

June 16, 2026

Many young people take food service jobs during the summer. It’s a good way to…

Read More
Tax Season 2026 Continues!

We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments