Tax Refund


A new stopgap spending plan. The legislation unveiled Sunday night would fund the Departments of Agriculture, Energy, Transportation and Housing and Urban Development through March 1, and extend funding for the Departments of Defense, Homeland Security, and others through March 8. If passed, it would be the third continuing resolution (CR) adopted since the expiration of 2023 funding on Sept. 23 last year. The Senate plans to take its first procedural vote on the CR later today.

A shutdown during tax filing season? IRS Commissioner Danny Werfel told reporters last week that a lapse in funding would “increase the risk that we don’t have as smooth a filing season as we intend to have.” While the IRS would maintain some operations during a shutdown, Werfel added that a shutdown during filing season would create additional uncertainty.

Prospects for an expanded Child Tax Credit (CTC) remain unclear. The Washington Post reports on how an expansion would primarily benefit low-income families with children. TPC’s Nikhita Airi and the Urban Institute’s Michael Karpman share evidence suggesting the CTC expansion would ease hardship among families with children. Lawmakers have been negotiating a deal to expand the CTC and renew some expired business tax provisions, but the House Ways & Means Committee’s top Democrat, Rep. Richard Neal (D-MA), has concerns about the package. The Post reports that Sen. Chuck Grassley (R-IA) says it’s unlikely an agreement on tax legislation will be reached in January.

Lawmakers are targeting the tax breaks that help their opponents. TPC’s Howard Gleckman questions an emerging pattern. Progressive lawmakers have demanded that Intuit explain its use of the research and experimentation tax credit. House Ways & Means Chair Jason Smith (R-MO) continues to threaten certain universities’ tax-exempt status for actions he disagrees with. Howard warns that while it isn’t unusual for Congress to seek information on how a business uses tax benefits, “it is troublesome when they threaten to use the revenue code as a political cudgel.”

The importance of Stanley Surrey’s tax legacy. TPC’s Gene Steuerle recounts the work of Stanley Surrey, the first head of Treasury’s Office of Tax Policy (OTP). Surrey established a model for how policy should be conducted within government and demonstrated the importance of good analysis on policy outcomes. Gene and Drexel University’s Assaf Harpaz, a visiting professor at the Thomas R. Kline School of Law, examined Surrey’s legacy in a comprehensive volume of Law and Contemporary Problems. An excerpt is reprinted here

 

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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