Tax Refund

How do we know if the IRS is spending its new $80 billion wisely? Hint: It won’t be easy. TPC’s Janet Holtzblatt concludes that some of the easiest-to-measure metrics, such as the number of audits or answered phone calls, or changes in the size of the tax gap, might not be the best way to figure out whether the agency is spending the money wisely. Janet concludes: “It’s easy to focus on what can be counted. But without an understanding of the broader context, a number won’t be enough to determine whether the IRS is spending its new money well.”

The new IRS Commissioner will have his work cut out for him. Daniel Werfel, President Biden’s pick for the top IRS post, is waiting for the Senate to schedule a confirmation hearing. But his challenges are not waiting. As of Nov. 25, the agency still was processing 3.2 million individual tax returns, and he’ll need to decide how to spend that  $80 billion in new funding.  “The management challenges are significant…” said former IRS Commissioner John Koskinen. “It’ll be an interesting but good challenge for [Werfel]. I think he’s more than up to it.”

Who’ll be the next House Ways & Means Chair? The contenders are Reps. Vern Buchanan of Florida, Jason Smith of Missouri, and Adrian Smith of Nebraska. The panel’s current top Republican, Kevin Brady of Texas, retires at the end of this month. The Republican Steering Committee may not decide until after the Jan. 3 vote for Speaker.

Seven Senate Democrats introduce “Close Big Oil Tax Loopholes” legislation. Led by New Jersey’s Bob Menendez, the bill would repeal key tax subsidies such as drilling cost deductions, deepwater royalty relief, and carbon capture credits for enhanced oil recovery. The bill would also tighten rules for deducting foreign taxes and the “depletion allowance” for oil and gas wells. It has no chance of passage. 

No budget deal in Michigan yet. Democratic Governor Gretchen Whitmer and the Republican-led legislature failed to agree on a fiscal plan at the end of this year’s legislative session. One sticking point: A plan to spend $200 million to entice businesses to stay in or relocate to Michigan by repealing sales and use tax on delivery and installation services. Whitmer’s office indicated that an agreement remains possible—when a Democratic-led legislature is seated in January.

EU: Platforms like Uber and Airbnb should pay VAT. The European Commission released an €18 billion value-added tax proposal yesterday. It would require online platforms such as short-term travel and rental sites to collect the VAT owed by their users. The European Union estimates that its VAT tax gap, or the difference between tax owed and collected, was €93 billion in 2020. 


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].

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *