Tag: IRS

Republicans open new line of attack on IRS

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The IRS is back in Republicans’ crosshairs following a ProPublica report based on the confidential tax records of the wealthiest Americans.

Republicans have long disliked the tax-collection agency, and have been critical of President Biden’s proposal to give the IRS significantly more resources. Now, GOP lawmakers are amplifying their attacks on the IRS in light of an unauthorized disclosure of tax data to ProPublica, arguing that it undermines taxpayers’ ability to have confidence in the agency.

“This is an astonishing breach of trust that should make taxpayers very concerned,” Rep. Kevin Brady (Texas), the top Republican on the House Ways and Means Committee, told reporters Friday. Continue reading.

IRS pushes filing deadline to May 17 as agency grapples with backlog of returns

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Change comes as agency sends third round of stimulus payments and prepares to implement other parts of the American Rescue Plan

The Internal Revenue Service announced on Wednesday it is postponing the country’s tax-filing deadline until May 17, as the agency grapples with a mounting backlog of 24 million returns awaiting processing since the 2019 tax year.

The workload has put the agency underwater — and under political siege — as lawmakers fret that long-unresolved troubles at the IRS could undercut the Biden administration’s economic recovery efforts. Millions of Americans have not received some stimulus checks under prior coronavirus aid packages, even as the tax agency continued distributing payments Wednesday under the $1.9 trillion stimulus signed into law this month.

The IRS shared the full scope of its backlog with the House Ways and Means Committee and the agency’s own watchdogs in recent days. The numbers, obtained by The Washington Post, dwarf the data the IRS has shared with the public. Explaining the postponement, IRS Commissioner Chuck Rettig said in a statement the government is doing “everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities.” Continue reading.

Tax preparers warn unemployment recipients could owe IRS

The Hill logoTax preparers are concerned that many of the millions of Americans receiving unemployment benefits due to the pandemic are unaware that they might owe money to the IRS next year.

Jobless benefits are subject to federal income taxes, as well as state income taxes in most parts of the country.

But workers who are collecting benefits for the first time may not be aware of those tax implications, or they might opt against having taxes withheld from their benefit payments. People who do not have enough money withheld during the year could end up with smaller refunds or balances due to the IRS when they file their 2020 tax returns. Continue reading.

IRS whistleblower said to report Treasury political appointee might have tried to interfere in audit of Trump or Pence

Washington Post logoAn Internal Revenue Service ­official has filed a whistleblower complaint reporting that he was told that at least one Treasury Department political appointee attempted to improperly interfere with the annual audit of the president’s or vice president’s tax returns, according to multiple people familiar with the document.

Trump administration officials dismissed the whistleblower’s complaint as flimsy because it is based on conversations with other government officials. But congressional Democrats were alarmed by the complaint, now circulating on Capitol Hill, and flagged it in a federal court filing. They are also discussing whether to make it public.

The details of the IRS complaint follow news of a separate, explosive whistleblower complaint filed in August by a member of the intelligence community. That complaint revealed Trump’s request of Ukranian leaders to investigate former vice president Joe Biden, a political rival. It has spurred an impeachment probe on Capitol Hill.

View the complete October 3 article by Jeff Stein, Tom Hamberger and Josh Dawsey on The Washington Post website here.

The IRS turned over Nixon’s tax returns the same day a congressional panel asked for them

Washington Post logoThe Internal Revenue Service turned President Richard Nixon’s tax returns over to a congressional committee the same day in 1973 that the panel requested them for a review, according to letters released by House Democrats on Thursday.

The newly released documents appear to contradict the Trump administration’s claims that House Democrats’ demands for the president’s tax returns are “unprecedented,” and suggest a split between this administration and past IRS officials over the interpretation of the law.

Congressional Republicans denied any similarity between the two episodes, pointing out that Nixon requested the investigation into his returns while Trump has not.

View the complete July 25 article by Jeff Stein on The Washington Post website here.

Not Enough Cops on the Beat: IRS Cuts Have Benefited Wealthy Tax Cheats

Recently, high-profile investigations have brought tax evasion to the forefront of the public consciousness. Paul Manafort and Michael Cohen, confidantes of President Donald Trump, were found guilty on counts of tax fraud and evasion, among other crimes. These investigations raise questions about why these individuals thought they could get away with tax evasion and why they only got caught after becoming entangled in separate investigations. One reason seems to be that when it comes to policing high-end tax evasion, there are nowhere near enough cops on the beat.

Indeed, the IRS has faced a near decadelong retrenchment; in fiscal years 2010–2017, its budget was cut by 17 percent in inflation-adjusted terms. Over the same period, the largest cuts to the IRS were to personnel tasked explicitly with performing examinations. In fact, the employees who saw their numbers reduced the most were revenue officers and tax technicians—by 44 percent and 43 percent, respectively—both of which support enforcement activities by analyzing financial statements, conducting research and interviews, and resolving examination issues. The third-most severe personnel cuts were to revenue agents, who, among other things, conduct onsite interviews, which are extremely important for audits of both high-income individuals and businesses. (see Figure 1) Continue reading “Not Enough Cops on the Beat: IRS Cuts Have Benefited Wealthy Tax Cheats”

Fight escalates over Trump’s tax returns

Tensions are mounting in the fight over President Trump’s tax returns, as the deadline for when Democrats said the IRS must provide them to Congress approaches.

The escalating fight between Trump and Democrats puts pressure on two key administration officials who will testify on Capitol Hill on Tuesday: Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig.

Trump’s surrogates are publicly criticizing Democrats’ request for the returns, with acting White House chief of staff Mick Mulvaney saying on Sunday that Democrats will “never” obtain the documents.

View the complete April 9 article by Naomi Jagoda on The Hill website here.

Super-rich tax cheats can now expect to avoid audits after years of Republican sabotage guts IRS

In many ways, the federal government lacks the good sense God gave a bank robber.

Here is a picture of neglect: Out of every 100 taxpayers who reported more than $1 million in income last year, just three got audited by the Internal Revenue Service (IRS).

The feds were similarly reticent to examine the filings of corporate taxpayers, auditing less than half of the 633 separate business entities that currently hold assets whose value exceeds $20 billion.

These alarming figures are just the continuation of a multi-year downward trend on basic accountability for those taxpayers who are best positioned to pay fancy accountants to skulk through the tax code looking for places to hide their loot from the public.

View the complete March 8 article by Alan Pyke on the ThinkProgress website here.

House votes to reopen Treasury Dept., IRS

The Democratic-led House approved a bill Wednesday to reopen the Treasury Department, Internal Revenue Service and Small Business Administration, among other federal agencies.

The chamber voted 240-188 to advance the measure, with eight Republicans bucking party lines to back the bill, which is the first of four bills expected to be brought to the floor by Democrats.

The Republicans who voted to advance the measure Wednesday included Reps. Elise Stefanik (N.Y.), Will Hurd (Texas), Fred Upton (Mich.), John Katko (N.Y.), Brian Fitzpatrick (Pa.), Greg Walden (Ore.), Adam Kinzinger (Ill.) and Herrera Beutler (Wash.).

View the complete January 9 article by Juliegrade Brufke on The Hill website here.

White House rules IRS can issue tax refunds during shutdown, aims to bring back agency employees

The White House on Monday directed the Internal Revenue Service to pay tax refunds to millions of Americans during the federal shutdown, marking its most dramatic reversal yet of past legal precedent as officials scramble to contain public backlash from the funding lapse.

Last year, and during previous administrations, the IRS said it would not pay tax refunds during a government shutdown. But Trump administration lawyers ruled Monday that the refunds could be processed after all, a move that some Democrats called legally dubious.

The decision could prove extremely consequential for U.S. households and the U.S. economy. Last year, between Jan. 29 and March 2, the IRS paid more than $147 billion in tax refunds to 48.5 million households.

View the complete January 7 article by Damian Paletta, Jeff Stein and Juliet Eilperin on The Washington Post website here.