Will Treasury delay Tax Day again? Treasury Secretary Steven Mnuchin suggested that he may delay deadlines for filing and paying taxes once again. As a result of the pandemic, Treasury moved the April 15 deadline to July 15, but the IRS has processed 12.2 percent fewer tax returns than at that time last year. It has processed 11.8 percent fewer refunds.
The IRS will pay interest on “late" tax refunds. Many tax filers claiming refunds this spring and summer also will receive interest payments from the IRS going back to April 15. Even those who have not yet filed will get the money. The tax code requires the IRS to pay interest if a refund is delayed for more than 45 days beyond the original tax-filing deadline. Interest payments may arrive separately from refunds. That interest, by the way, will count as income on 2020 tax returns.
Senate Democrats question Economic Impact Payments by debit cards. Fifteen Democratic senators wrote Mnuchin and IRS Commissioner Charles Rettig. They are worried that the debit cards impose unnecessary burdens and fees on Americans who might have preferred a payment by check. Moreover, they argue, the debit cardholder agreement may allow Money Network Financial to sell personal information to third parties for marketing or other commercial purposes.
Federal trust funds are running dry. The Committee for a Responsible Federal Budget projects that the COVID-19 economy is crushing the three big federal trust funds. The highway fund will run out of money in 2021, Medicare’s hospital insurance fund will run dry in 2023, and the Social Security Trust funds will be exhausted in 2031.
Coronavirus spread prompts IMF to slash global growth forecast. The International Monetary Fund projects that global economic gross domestic product (GDP) will fall by 4.9 percent in 2020, and the US economy will contract by 8 percent. The IMF forecasts a rebound in the US and around the world in 2021. Still, the group estimates the pandemic will cost the global economy over $12 trillion over the next two years.
Tune in at noon today for the next episode of TPC’s The Prescription. It will feature former assistant secretary of Labor William Spriggs (@WSpriggs). The chief economist of the AFL-CIO and professor of economics at Howard University wrote the essay “Is Now a Teachable Moment for Economists?,” following the death of George Floyd. He’ll be interviewed by TPC senior fellow Howard Gleckman (@howard_gleckman). The virtual event will stream here from 12:00 to 12:30 today.
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 firstname.lastname@example.org.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2020.