WASHINGTON, D.C. – U.S. Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), along with Congressmen John Lewis (D-GA) and Richard Neal (D-MA), called on the Government Accountability Office to study the Opportunity Zones tax incentive program following multiple reports of possible wrongdoing by senior administration officials in implementing the 2017 tax incentive program. The Opportunity Zones program, based on bipartisan legislation authored by Booker, Senator Tim Scott (R-SC), and Congressman Ron Kind (D-WI), creates a tax incentive for individuals who reinvest unrealized capital gains into high-impact, long-term projects in high-poverty communities across the country.
In a letter, the lawmakers asked the GAO to collect and analyze information about how the Opportunity Zones incentive has been implemented by the Internal Revenue Service (IRS) and the Treasury Department, how census tracts were designated as Opportunity Zones, what compliance measures were used to ensure adherence to the law, and how the Treasury Department can measure the effectiveness of the tax incentive.
“Given the breadth of the Opportunity Zone incentive, the lack of reporting requirements under current law, as well as the high levels of reported interest from taxpayers, we believe it is critical that the Government Accountability Office (GAO) assist Congress in evaluating the incentive and monitoring its implementation and outcomes.”
This week’s letter follows a letter Booker sent to the Treasury Department last week calling for an immediate and complete review of its actions certifying Opportunity Zones for eligibility requirement conformance. In the coming weeks, Booker plans to continue to weigh in with Treasury on the development and implementation of robust reporting requirements that will provide much needed information on how this incentive is being used.
Booker and Scott originally introduced the Investing in Opportunity Act in April 2016, and a provision based on the bill was wrapped into the 2017 GOP tax bill. However, critical reporting requirements that were included in Booker and Scott’s original bill were removed from the final measure that became law in December 2017.
Booker has repeatedly and aggressively pushed to restore these safeguards, including authoring a bipartisan bill that would restore the removed safeguards with Senators Scott, Maggie Hassan (D-NH), and Todd Young (R-IL) earlier this year. Booker also wrote to the Treasury last month and in January urging it to adopt stronger reporting requirements for investors using the tax incentive.
The full letter is available here and below:
The Honorable Gene L. Dodaro
Comptroller General of the United States
United States Government Accountability Office
441 G Street, NW
Washington, D.C. 20002
Dear Comptroller Dodaro:
The “Opportunity Zone” provisions of Public Law 115-97 allow investors to reduce and defer taxes on capital gains by reinvesting those gains in “qualified opportunity funds,” which invest in opportunity zones. In addition, for investments in qualified opportunity funds held ten years or more, gain on the investment is exempt from tax. More than 8,700 census tracts were designated as Opportunity Zones out of approximately 42,000 eligible tracts, and an estimated one in ten Americans now live in one of these designated areas.
Given the breadth of the Opportunity Zone incentive, the lack of reporting requirements under current law, as well as the high levels of reported interest from taxpayers, we believe it is critical that the Government Accountability Office (GAO) assist Congress in evaluating the incentive and monitoring its implementation and outcomes. To this end, we request that GAO provide a report that:
In addition, when sufficient data become available, we are requesting that GAO provide a subsequent report that: