Tax Refund


GAO: The IRS could improve audits of high-income/high-wealth taxpayers. In its report made public yesterday, the US Government Accountability Office (GAO) made eight recommendations to improve audits of wealthier individuals. Recommendations include a review of research efforts, audit selection models, and auditor hiring and training guidelines. GAO also recommends that the IRS centralize the management of its high-income/high-wealth audit programs. The IRS generally agreed with the recommendations.

January’s federal budget deficit fell sharply compared to last year. Treasury reported that the federal budget deficit was $17 billion for the month, or 43 percent less than the $39 billion deficit in January 2023. That is in part because tax refunds fell after the IRS cleared its backlog of pandemic-delayed tax returns. Individual tax refunds were $15 billion lower in January 2024 than in January 2023.

IRS Chief of Criminal Investigation to retire. The IRS announced that Jim Lee will retire in April after 30 years with the agency. Lee joined the IRS in 1995 in Detroit as a special agent. He has led the Criminal Investigation unit since October 2020. Lee is a 2023 recipient of the Presidential Rank Award for Distinguished Service and was recently chosen to co-chair the Treasury Department’s Counter-Fentanyl Strike Force. The IRS has not yet named his successor. 

Alabama’s tax on groceries will hold steady for now. The tax won’t be reduced this year, but some state lawmakers remain optimistic that reductions will come in the near future. The Joint Study Commission on Grocery Taxation is studying the impact of last fall’s one-percentage-point reduction in the sales tax (from 4 percent to 3 percent) on most store-bought items. The rate could drop to 2 percent in September if certain revenue growth targets are met.

In Utah, a bill to tax “novel vehicles.” A state representative has introduced a bill that would require owners of any nontraditional vehicles using public thoroughfares and waterways to apply for a novel vehicle license for $1. Unlike other vehicle fees in Utah, the proposal would give lawmakers the authority to raise the tax; the Utah Tax Commission has authority to raise fees on motor vehicles. Vehicles would include gas-powered dog sleds, personal flying machines, or e-foil watercraft. These vehicles are currently not registered and not taxed. 

 

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