House Democrats are reviving changes to individual retirement accounts containing millions of dollars as lawmakers seek to finalize taxes on the rich to fund President Joe Biden’s agenda.
Changes included in a House bill released on Wednesday limit tax-advantaged accounts and give the Internal Revenue Service more control over them. The legislation, which House leaders say could get a vote as early as Thursday, is not yet final and will likely undergo several more revisions as it passes through Congress.
The legislation would prevent contributions to traditional individual retirement accounts or Roth accounts once they reach $ 10 million and require mandatory distributions for accounts that exceed that amount. The bill would also require accounts of at least $ 2.5 million to report their balances each year to the IRS.
The provision is driven by concerns that wealthy Americans are using retirement accounts as a powerful means of tax evasion. The most extreme example could be Peter Thiel, a billionaire who, according to a ProPublica report that cites confidential tax records, raised $ 5 billion in a Roth individual retirement account.
Despite rules restricting contributions to retirement accounts, more than $ 279 billion is in mega-IRAs, individual retirement accounts of at least $ 5 million each, according to the Non-Partisan Joint Committee on Taxation of Congress.
Sen. Ron Wyden of Oregon, chairman of the Senate Finance Committee, said Wednesday that he found the House’s action on “IRA abuses” interesting.
“It looks like the House has added a provision,” he said. “I’ll have to see all the details.”
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