Tax Refund

What will the post-election session bring? Congress returns this week following a surprise election where Democrats retained control of the Senate. While votes for House seats still are being counted, Republicans have the inside track to control that chamber by a narrow margin. The only must-pass bill during the short lame-duck session is a budget. What will Congress do about expiring (or expired) tax provisions?  

Biden picks Daniel Werfel to helm the IRS. Werfel, a former acting IRS chief during  the Obama administration, would succeed Charles Rettig as commissioner. Werfel, currently at the Boston Consulting Group, also served as Comptroller at the Office of Management and Budget. The Senate must confirm the nomination. 

A mixed bag of state ballot measures. TPC’s Richard Auxier outlines the results. Massachusetts raised taxes on the rich. California didn’t. Colorado voters cut taxes…and raised them. Maryland will legalize and tax recreational marijuana. Arkansas won’t. Richard’s conclusion: Each state has its own politics and history that shape voters’ perceptions.

IRS, Treasury, and House panel urge Supreme Court to not block Trump tax return order. The IRS and Treasury submitted a brief opposing former President Donald Trump’s last-ditch request to keep his returns from the House Ways & Means Committee. The panel argued any delay would “leave the Committee and Congress…little or no time to complete their legislative work during this Congress, which is quickly approaching its end.” If Republicans win control of the House, they will drop the request for Trump’s returns. 

Speaking of the Supreme Court, it’s reviewing penalties for breaking FBAR. TPC’s Rob McClelland reviews the arguments over how much in penalties the US government can impose on citizens who fail to submit a Foreign Bank Account Report (FBAR) on foreign financial accounts of $10,000 or more. Whatever the High Court decides, Rob says the law can cause huge problems for people with relatively small accounts. He suggests Congress reform the law by indexing the reporting threshold for inflation and clarifying who must file and how the penalties should be assessed.

Tune in this afternoon: How should the IRS spend $80 billion? Join TPC in a virtual event that will explore how the agency can best invest its new funding and how to measure success. The virtual TPC event begins at 3:00 pm with former IRS commissioners Fred Goldberg, John Koskinen, and Charles Rossotti and concludes with a discussion among three top government officials about how their agencies likely will evaluate the new spending. Register and tune in here.

Diagnosing the election on Thursday’s The Prescription webcast. George Callas, former top tax aide to House Republicans, will join TPC’s Howard Gleckman to discuss the election results and what they mean for tax policy this year and next.   

Proposals due Dec. 1 for papers for the next IRS-TPC Joint Research Conference on Tax Administration. The conference will take place at the Urban Institute on June 22. Possible paper topics include measuring and influencing taxpayer compliance, estimating compliance costs, complexity, administration, and taxpayer behavior. E-mail proposals to: [email protected] with “proposed paper” in the subject line. Completed papers will be due  May 22, 2023. 


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].

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