The Senate Appropriations Subcommittee on Financial Services on Tuesday advanced a bill that would require the IRS to return $26 billion to Americans who never cashed in their matured bonds.
Subcommittee Chairman Sen. John Kennedy (R-La.) said the IRS was diligent about collecting taxes, but made no effort to return unredeemed bonds, which people can lose or forget about after they mature.
“If we don’t pay our taxes in the right amount and on time, they will chase you like a hound from Hades,
so I find it ironic if not hypocritical that our department of Treasury, which houses and supervises [the] Internal Revenue Service, is sitting on $26 billion of fully matured but unredeemed savings bonds,” he said.
The bill would provide $29 million to the IRS for the express purpose of digitizing the database of names and addresses associated with unredeemed bonds, and require them to provide the information to state treasurers to contact individuals.
The IRS told the committee it needed $128 million to do the job, a figure Kennedy dismissed as coming from “La La Land.”
“Our friends at Treasury have fought tooth and nail to keep this money. It’s shameful,” he said.
Citizens in some states would see a significant windfall, he added.
Treasury has $2.1 billion in unredeemed bonds from Texas alone, as well as $532 million from Arkansas, $312 million in Oklahoma and $209 million in Kansas.
The subcommittee’s top Democrat, Sen. Christopher Coons (Del.), whose home state could see $72 million from unredeemed bonds, praised Kennedy for the effort to release the $26 billion.
“That’s larger than our entire subcommittee’s allocation,” he noted.
He also praised the bill’s allocation of $200 million toward IRS enforcement, noting that every dollar of additional enforcement tends to produce $5 in additional revenue.