IRS Commissioner Rettig: Up to $1 trillion in taxes are uncollected annually. In testimony before the Senate Finance Committee yesterday, IRS Commissioner Charles Rettig said reasons for the gap between taxes owed and paid every year include unreported income from virtual currency transactions, foreign-sources, and illegal activities. At the same hearing, Sen. Rob Portman said he is drafting a bill to sort out the tax treatment of virtual currencies.
Still aiming for periodic child tax credit payments by July. Rettig also told the panel that the IRS still plans to have an online portal for families to claim advanceable child tax credit payments up-and-running by July 1, though he said the system could be adjusted after that date. He warned that the IRS might delay the rollout entirely if it has unresolved security risks.
But no reprieve for estimated tax payers. Rettig made one other bit of news, though it was no surprise. Despite pressure from many in Congress and tax preparers, Rettig said those who owe estimated tax on April 15 should dust off their checkbooks. While Treasury extended the filing deadline for a month, other payments normally due on April 15 are…still due on April 15.
Tune in tomorrow for the Prescription. Long-time National Taxpayer Advocate Nina Olson will be TPC’s guest. Olson is the current executive director of the nonprofit Center for Taxpayer Rights. She’ll talk about the second COVID-19 tax season as well as the future of the IRS. Learn more and register here for Thursday’s noontime event.
Connecticut will start collecting family leave tax from non-union state employees. Connecticut will begin offering paid leave benefits, funded by a leave tax, in January. Other employers in the state started collecting the tax this past January 1, but the state had to upgrade software before taking the new deductions from its employees’ paychecks. State employees will pay an extra tax through June 30 to make up for the delay, then pay the same 0.5 percent rate as other employees.
Massachusetts lawmakers set to debate the state’s tax breaks. Firms and households claim $17.8 billion in tax breaks every year (paywall). There are more than 200, but 10 cost over $200 million each annually. And analysts say they many no longer are effective. The Senate Budget Committee will examine who gets the tax breaks, while the Senate Revenue Committee may consider repealing many. House members, however, appear more reluctant to kill the tax subsidies. Will the two Democratic-led chambers come to an agreement?
IRS: Don’t forget Free File! The agency yesterday urged low- and moderate-income families, especially those who don’t normally file a 1040, to use IRS Free File to e-file their own federal tax return at no cost. The program makes brand-name tax software free for anyone who makes $72,000 or less. So far this year, more than 2.96 million individuals and couples have filed through the online service. Available through IRS.gov, Free File is available on many devices, including computers and mobile phones.
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