Sen. Ron Wyden (D-Ore.) speaks to reporters as he arrives to the Capitol for a cloture vote regarding a nomination on Wednesday, January 5, 2022.

Sen. Ron Wyden (D-Ore.) speaks to reporters as he arrives to the Capitol for a cloture vote regarding a nomination on Wednesday, January 5, 2022.

A new proposal by Senate Finance Committee Chair Ron Wyden (D-Ore.) seeks to eliminate tax benefits for sanctioned Russians doing business in the U.S., as well as to nix U.S. tax credits and deductions for taxes paid to Russia.

“Russian oligarchs and companies supporting [Russian President Vladimir] Putin shouldn’t be getting tax breaks in the United States,” Wyden said in a statement. “We should take away every special tax benefit for all sanctioned individuals, as well as give [Treasury Secretary Janet] Yellen the authority to identify other individuals, companies, or governments supporting the invasion that should lose their tax goodies.”

The plan would cancel lower withholding tax rates on payments like dividends and interest for wealthy Russians and Belarusians listed by the Treasury Department’s Office of Foreign Asset Control (OFAC).

“Providing the Treasury Secretary with authority to identify other individuals and entities creates a backstop that ensures those not subject to OFAC sanctions face financial penalties if appropriate,” Wyden said.

The proposal would also revoke the preferential corporate tax rate of 10.5 percent for companies doing business in Russia, as well as the foreign tax credit that ensures companies aren’t double taxed across different countries. Russia would share the U.S. tax status of countries including Iran, North Korea, Syria and Sudan.

“It’s not immediately clear if Wyden wants U.S. companies to start breaking Russian tax rules,” Daniel Bunn, an international tax researcher with the Washington, D.C.-based Tax Foundation, said in an interview. “But cutting Russia off is certainly an idea that’s being discussed.”

In 2018, US companies paid $130 million in Russian taxes on $890 million in taxable income, according to IRS foreign tax credit records.