Baucus To Veto Solomon's Nomination To Key Treasury Post

by Leroy Baker, Tax-News.com, New York

24 July 2006

Max Baucus, the senior Democrat on the Senate Finance Committee, has announced his intention to veto the nomination of Eric Solomon to a key Treasury post unless the department comes up with a definitive strategy to narrow the tax gap.

At his recent confirmation hearing for the post of Deputy Treasury Secretary for Tax Policy, Solomon was questioned by Baucus on the IRS’s failure to use tax shelter disclosure rules and stiff penalties designed by Congress to help close the annual tax gap, which is estimated by Baucus to be $345 billion.

The 'tax gap' is the difference between the total of taxes that are theoretically due the amount that is collected in a timely fashion.

Baucus also asked Solomon to commit to ensuring the delivery by the end September of a comprehensive IRS plan to close the tax gap. While Solomon responded that he shared Baucus's concerns, he stated that he would not commit to such a timetable.

In a statement issued last Thursday, Baucus revealed that he would not let the nomination move forward "without a pledge for action on a real timetable."

"I told Mr. Solomon at his confirmation hearing that it's time for bold deeds on the tax gap, not just more words," stated Baucus.

Solomon's nomination needs approval from both the finance committee and the full Senate before he can take the role, which is considered a vital position within the Treasury as postholders play a central role in the shaping of tax policy.

The nomination by President Bush was generally welcomed by senior administration officials, lawmakers and tax experts, who consider Solomon to be an able administration official in the tax sphere.

Solomon, who first joined the Treasury in 1999, currently serves as Treasury's Acting Deputy Assistant Secretary for Tax Policy and Deputy Assistant Secretary for Regulatory Affairs. He has been credited with successfully overseeing new regulatory guidance during a period of frequent changes to tax legislation.

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