Treasury Secretary Steven Mnuchin talked tax penalties and tax returns. In his first appearance before the 116th Congress’ House Ways & Means Committee, Mnuchin said the Trump Administration will review “very quickly” whether to provide additional penalty relief to taxpayers who did not have enough tax withheld from their paychecks in 2018. He also told the panel that if its chair were to instruct him to turn over any of President Trump’s tax returns, he would “consult with the legal department within Treasury” and “follow the law.”
Senators offer a bipartisan fix to the TCJA’s retail glitch. The Tax Cuts and Jobs Act unintentionally required stores and restaurants to deduct the costs of renovations over 39 years. GOP Senator Pat Toomey and Democratic Senator Doug Jones introduced a bill to retroactively allow businesses to immediately deduct those costs. The Joint Committee on Taxation estimates that the change would not impact federal revenue.
And two House Democrats want to extend the 2018 tax filing season. Forbes explains that Illinois Reps. Sean Casten and Lauren Underwood have introduced a bill to give taxpayers an extra five weeks to file their individual tax returns for 2018. The bill would push deadline back to May 20, an extension designed to account for the partial government shutdown.
Senator Wyden responds to college admissions scam. The Senate Finance Committee’s top Democrat plans to introduce a bill to end tax breaks for contributions to colleges and universities before or during enrollment of the donor’s child. This week the federal government charged more than 40 people — including 30 parents of college hopefuls — with a range of crimes, including bribing coaches to recruit students who are not athletes and paying others to take college entrance exams for their children.
Is there a better way to close the tax gap? A taxpayer who claims the Earned Income Tax Credit is twice as likely to be audited as a taxpayer who does not. TPC’s Elaine Maag and Bob Weinberger suggest that Congress and the IRS can better address the EITC improper payment problem by providing more help to claimants. It could collect more revenue by focusing audits on small businesses, where noncompliance contributes to seven to ten times more to the tax gap than the EITC.
Congress will not be in session next week. The Daily Deduction will publish Monday, March 17, and return to its regular schedule on Monday, March 25.
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