Lots of IRS News, Good And Bad

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Taxpayer Advocate: “More misery in 2022.” In her annual report to Congress, National Taxpayer Advocate Erin Collins said taxpayers suffered “more misery” last year. Among the many problems: “About 13 million individual taxpayers filed paper returns….Refunds for these taxpayers were delayed, generally by six months or longer. Millions of e-filed individual returns were “suspended” because they tripped IRS processing filters and required manual review by IRS employees.”  

But the backlog is shrinking.  At the end of 2022, the IRS had reduced the number of unprocessed individual income tax returns to 1 million from 4.7 million and the number of  unprocessed business returns to 1.5 million from 3.2 million, Collins reported. The tax year 2022 filing season begins in less than a month. 

And more help is on the way. Treasury reports the IRS hired 5,000 new taxpayer service staffers since October, using funding from the Inflation Reduction Act. Many will be answering the phones and Treasury says wait times will be cut in half—though still up to 15 minutes, which many tax filers still will find unacceptable. 

The IRS gave a costly gift to third-party payment platforms, setting a terrible precedent. Late last year, the IRS announced it won’t enforce the new $600 Form 1099-K reporting threshold until after 2023 but cited no legal authority for the move. TPC’s Steve Rosenthal and New York University School of Law’s Daniel Hemel argue that the delay will lead to more evasion and cost the federal government over $1 billion this year. And, they say, the agency’s failure to invoke any statutory authority for its decision raises concerns about its commitment to following the law. 

And the battle over IRS funding will go on, with GOP critics in a good position to win. The GOP House’s vote to rescind 90 percent of the new funding for the IRS was largely mocked as nothing more than a symbolic message bill. But TPC’s Howard Gleckman says when Congress addresses the agency’s 2024 budget later this year, don’t be surprised to see Democrats concede significant funding. With much of the federal budget under fire, saving IRS funding won’t be a top priority.  

Brace yourselves for debt ceiling brinksmanship. Associated Press reports on the current state of the nation’s debt. The federal government could reach its $31.4 trillion borrowing limit as soon as this month, leading Treasury to take “extraordinary measures” to keep the government running until this summer. Between now and then, expect a large cast in high-stakes political theater. 

Taxes (and smoking bans) sank cigarette sales in Wisconsin. Over the past 20 years, the number of packs purchased in Wisconsin fell from 420 million to just under 193 million, according to the Wisconsin Policy Forum. In fiscal year 2010, after two tax rate increases and before indoor smoking bans, the cigarette levy generated $644.3 million or 4.3 percent of state taxes. In fiscal 2022, the tax generated $482.4 million or 2 percent of all state taxes. Still, the overall state budget remains strong.

In Washington State, a plan to exempt some news outlets from tax. Two Democratic lawmakers will introduce a bill to exempt Washington newspapers and eligible online news outlets from a business and occupation tax. These organizations currently pay a reduced rate that is due to expire in July 2024. The exemption, backed by the state attorney general, would cost Washington $1 million annually but aims to save jobs and protect what sponsors call a critical community service. 

 

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].


Authore – Abhi bhardwaj

Hello friends, my Abhi Bhardwaj I am the owner of newsagent24.com and I am also a student. recently I just completed my graduation I am doing blogging since 2020 I love to write and always love exploring, and sharing knowledge with others that is why I started this blog basically this blog is related to us stock market, real estate, insurance, crypto, finance and tax if you have any qouri then please don't be shy

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