Students with past-due loans sue the Treasury and Education departments over seizure of tax refunds. A federal order halted the seizure of these refunds during the pandemic, but a class-action lawsuit claims that Treasury and the Education Department withheld nearly $19 million from 11,049 borrowers since April. The lawsuit accuses the departments of ignoring the Trump administration’s 60-day moratorium on tax offsets. The Coronavirus Aid, Relief, and Economic Security (CARES) Act codified that moratorium and extended it until September 30.
IRS and Treasury issue carbon capture tax credit guidance. The rules apply to equipment placed in service on or after Feb. 9, 2018. Separately, the IRS issued guidance for renewable energy tax credits for energy sources such as wind, biomass, and solar panels.
Millions of paper tax returns have piled up at the IRS. Since the IRS closed its offices due to the coronavirus pandemic, an estimated 5 million unopened paper tax returns have piled up in storage. Thousands of IRS workers return to work today, facing a backlog of 10 million pieces of mail to open and process.
Florida may start collecting online sales tax. The state has held off on requiring residents to pay sales tax on their online purchases. That may change now that state tax revenues have fallen drastically due to the coronavirus pandemic. March sales tax collections fell by almost $600 million below previous estimates while total tax collections dropped almost a billion dollars below previous estimates. But residents are making more untaxed online purchases. Lawmakers may not act until they review June and July revenue reports. Of the 45 states that collect sales tax, only seven states don’t collect from online sales.
On Thursday at 1:30 PM: “The Prescription: Fiscal Policy for the COVID-19 Economy with guest Jason Furman.” TPC is hosting a biweekly series of online conversations on policy responses to the COVID-19 economy. This week, Jason Furman, former chair of President Obama’s Council of Economic Advisers and currently an economics professor at Harvard University’s Kennedy School, will be interviewed by TPC senior fellow Howard Gleckman. Register here for the 1:30 PM June 4 conversation via Zoom.
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