Cassidy, Thune, Colleagues Introduce Bill to Block Unfair IRS Audits Targeting Firearm Sales

Published 6:30 pm Wednesday, March 22, 2023

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WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA), John Thune (R-SD), and five Senate Republican colleagues today introduced the Merchant Category Code (MCC) Neutrality Act to prohibit the IRS from auditing taxpayers based primarily on the MCC used by their business. The bill would also require the IRS to provide a report to Congress with an annual total of audits initiated for each MCC, and it would serve as an additional check against the Biden administration’s $80 billion in new funding for the agency.


“No one should be targeted by the law simply for selling guns,” said Dr. Cassidy. “This bill protects our Constitutional rights from the Biden Administration’s new 87,000 new IRS employees.”


“The IRS shouldn’t have free rein to use audits to inappropriately scrutinize or intimidate taxpayers due to the nature of their lawful business, including licensed firearm dealers,” said Senator Thune. “I have been sounding the alarm on the lack of transparency and accountability from the Biden administration’s IRS for months now, which is why I’m proud to introduce this legislation that would provide much-needed oversight against potential targeted audits.”


“Using financial transaction information to surveil or discriminate against gun owners is just the latest attempt by corporate ideologues to chip away at the individual right to keep and bear arms,” said Randy Kozuch, interim executive director of the National Rifle Association-Institute for Legislative Action. “The NRA thanks Senators Thune and colleagues for their leadership in protecting the rights of law-abiding Americans and lawful industries across the nation.”


Cassidy and Thune were joined by U.S. Senators Mike Crapo (R-ID), Marsha Blackburn (R-TN), Steve Daines (R-MT), James Lankford (R-OK), and Thom Tillis (R-NC).


The MCC Neutrality Act responds to the recent creation of an MCC for firearm and ammunition stores by the Geneva-based International Organization for Standardization that would specifically categorize transactions made at firearm and ammunition retailers. MCCs enable payment processors to track purchases for functions like travel points and multipliers for dining or fuel without detailing the specific items purchased, but the creation of this new MCC was specifically sought with the intent to pressure lawful firearm retailers.


MCCs are submitted on IRS Form 1099-K, Payment Card, and Third-Party Network Transactions to verify transaction data, creating a potential avenue for the IRS to initiate targeted audits against certain MCCs. While leading payment processors have suspended implementation of the new MCC for firearm and ammunition stores, this legislation would protect any merchant or business from targeted audits primarily based on MCC designation.