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July 11, 2011
Tax Background Key to Bachmann's Presidential Pitch

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By Amy S. Elliott -- aelliott@tax.org

It's a notion with a certain logic: Who would be better to spearhead top-to-bottom tax reform than a former tax attorney?

If enough voters buy that argument, Rep. Michele Bachmann, R-Minn., a presidential candidate and a former IRS attorney, could stand to benefit. She hopes her plan to turn the economy around and create jobs by scrapping the tax code as we know it will help her secure the GOP nomination in 2012. Bachmann, who often introduces herself as a tax attorney, worked for five years as an IRS attorney in St. Paul, Minn., after receiving an LLM in taxation from the College of William & Mary Law School in Williamsburg, Va. The school has since discontinued its tax LLM program.

In a 2006 speech at a church in Brooklyn Park, Minn., Bachmann credited her husband and her faith for leading her to tax law:


    My husband said, 'Now you need to go and get a post-doctorate degree in tax law.' Tax law? I hate taxes. Why should I go and do something like that? But the Lord said: 'Be submissive to your husband,' and so we moved to Virginia Beach, Va. . . . and I pursued this course of study. Never had a tax course in my background. Never had a desire for it. But I was going to be faithful to what I felt God was calling me to do through my husband.

Bachmann said she similarly had no interest in going to law school but was also called to attend. She received her law degree in 1986 from O.W. Coburn School of Law at Oral Roberts University in Tulsa, Okla. She has described the law school, which no longer exists but whose students were transferred to what is now Regent University School of Law, as the first Christian law school in the United States where the law was taught from a biblical worldview. Bachmann received her bachelor's degree in 1978 from Winona State University in Winona, Minn., with a major in political science and a minor in English.

Bachmann was admitted to the Minnesota Bar in 1986 but, according to the Minnesota Lawyers Professional Responsibility Board, is not currently authorized to practice law in the state. Bachmann voluntarily transferred from active to restricted status; however, maintaining that status requires the payment of annual license fees. Minnesota's Lawyer Registration Office confirmed that Bachmann's license has been suspended for nonpayment. In response to a question about her license, Bachmann's spokeswoman said that "given her entry into public service, [Bachmann] is no longer practicing law in Minnesota."

Bachmann worked in tax law from 1988 through 1993 as a tax attorney with the IRS. Although details of that time are hard to obtain, Bachmann has said that she worked on hundreds of civil and criminal tax cases. In a 1992 Tax Court case, Manypenny v. Commissioner, she convinced the court that wages and self-employment income earned by a resident of the White Earth Indian Reservation were not exempt from federal income taxation. (For Manypenny v. Commissioner, T.C. Memo. 1992-260, see Doc 92-3984 or 92 TNT 97-14.)

In 1993 Bachmann left her position at the IRS and focused full time on raising her family. She became involved in politics in the late 1990s, running for a position on her local school board, then won a seat in Minnesota's Senate in 2000, and was first elected to the U.S. House of Representatives in 2006.

Upon arriving in Washington, Bachmann led an effort to establish "the American Taxpayer Bill of Rights," which focused on limiting government spending, protecting taxpayers' Social Security dollars, requiring a balanced budget, and establishing a right to a fair and simple tax code. Since then, the House Republican Steering Committee has twice passed her over for a position on the Ways and Means Committee, most recently in December 2010 when Bachmann's colleague from Minnesota, Erik Paulsen, got the nod instead.

Bachmann's experiences at the IRS seem to have fueled her interest in lowering taxes and streamlining the code. Her campaign website says her work as an IRS attorney "solidified her strong support for efforts to simplify the Tax Code and reduce tax burdens on family and small business budgets." On her congressional website, Bachmann says that while working at the IRS, she "saw firsthand that our nation's tax laws are hard to understand and undermine the country's prosperity by imposing needlessly harsh penalties on work, savings, and investments."

Karlyn Bowman, a senior fellow at the American Enterprise Institute, said Bachmann's background as a tax attorney "may give her greater credibility when she says the system should be scrapped and we should start over."

According to her campaign website, Bachmann wants to "deep-six" the entire Internal Revenue Code "so companies can invest again." She has said she views the current tax code as irreparable. In a December 2010 op-ed on the conservative political opinion website Townhall.com, Bachmann wrote, "Our founding fathers never intended a larger-than-life government manipulating our very economy via the tax code." She added that beyond cutting taxes for corporations and individuals, Congress should "begin a serious discussion about whether or not to scrap the current tax code and replace it with a fairer, flatter tax code."

In May 2010 Bachmann cosponsored a bill opposing the imposition of a VAT on top of the current tax system. In an April 2010 op-ed on Townhall.com, she wrote, "Small business owners cannot grow if every product they need has been taxed every step of the way."

On January 5 Bachmann introduced H.R. 86, the End Tax Uncertainty Act of 2011, which would permanently extend the 2001 and 2003 tax cuts (including the reduced rates for dividends and capital gains), permanently repeal the estate and gift taxes and the individual alternative minimum tax, and cut the federal corporate tax rate to 25 percent. (For H.R. 86, see Doc 2011-655 or 2011 TNT 8-26.)

In a June 11 Wall Street Journal profile, Bachmann said that in her ideal world, the federal corporate income tax rate would top out at just 9 percent and that if she could design the country's tax system from scratch, she would support a national sales tax and drop the capital gains rate to zero.

But if forced to work within the current tax system, Bachmann said she would broaden the individual income tax base, do away with all tax deductions, and lower the rates. She said all Americans should have to pay some income tax.

Speaking June 26 on CBS's Face the Nation With Bob Schieffer, Bachmann reiterated her call for a significant reduction in the corporate rate and a zeroing out of the capital gains rate, and she added that the tax code should allow for 100 percent expensing of business equipment. "That would go a long way toward job creators recognizing that this is a pro-business environment," she said.

Whether or not the public will give her tax reform ideas more weight because of her tax law background, Bachmann's message of fiscal responsibility and limited government is gaining traction. "People are paying a lot more attention to Bachmann now that she seems to be doing well polling-wise in Iowa and even seems to be closing the gap a little bit in New Hampshire," said Kyle Kondik, a political analyst with the University of Virginia's Center for Politics. As for any reluctance on Bachmann's part to provide further specifics on what impact her tax ideas would have on the country's bottom line, Kondik said, "She's no different than any other candidate."

Other highlights of Bachmann's views on taxes:

  • In 2007 and 2009, she introduced legislation to allow taxpayers to deduct the full amount of their out-of-pocket medical and dental expenses as a way to improve healthcare choice. Currently, only expenses that exceed 7.5 percent of a taxpayer's adjusted gross income may be deducted.
  • In 2008 Bachmann cosponsored legislation that would have provided a two-month holiday from income and FICA taxes, paid for in part with funds from the Troubled Asset Relief Program. Speaking June 28, 2011, at a campaign event in Raymond, N.H., Bachmann praised a supporter's suggestion for a one-year moratorium from the federal income tax.
  • Although she declined to cosponsor the Fair Tax Act of 2011 out of fear that a national sales tax would be levied on top of the current income tax system, Bachmann has said that she supports the idea of the FairTax reform plan to replace all federal income, payroll, and estate and gift taxes with a national retail sales tax.
  • In 2010 and 2011, she introduced legislation to eliminate the controversial two-year limitations period for requesting equitable innocent spouse relief. (For prior coverage, see Tax Notes, Apr. 25, 2011, p. 358, Doc 2011-8327, or 2011 TNT 75-1.)
  • In February 2011, while speaking on The Laura Ingraham Show, a political talk radio show, Bachmann criticized the IRS for its decision to treat money spent on breast pumps as a qualified medical expense under section 213(d), thereby making the expense eligible for a deduction. "To think that government has to go out and buy my breast pump for my babies? I mean, you want to talk about the nanny state?" Bachmann said. (For prior coverage, see Tax Notes, Feb. 14, 2011, p. 754, Doc 2011-2927, or 2011 TNT 29-2.)

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