- Posted by:
- Category: Tax Law
The House passes the “Extending Government Funding and Delivering Emergency Assistance Act.” House Appropriations Committee Chair Rosa DeLauro introduced the bill that reflects agreement among Senate and House Democrats yesterday afternoon and the House passed it last night. It would continue federal funding through December 3, provide $28.6 billion in disaster relief, and suspend the statutory debt limit through December 2022. It is not clear what the Senate will do with the bill.
Moody’s: Default would be “catastrophic.” A report by Mark Zandi and Bernard Yaros estimates the federal government will run out of borrowing authority on about October 20. They conclude even a very brief failure to extend its borrowing authority would “roil” markets. However, allowing the impasse to drag on would throw the economy back into recession and could have long-term corrosive effects on the overall economy that could take years to reverse.
New TIGTA report documents premature tax collection notices. The Treasury Inspector General for Tax Administration (TIGTA) found the IRS issued 89,338 premature notices and demands to 87,542 individual taxpayers about their 2019 tax returns before their taxes were due. The problem:The IRS extended the 2020 filing date to July 15. TIGTA did find the IRS effectively provided relief to taxpayers through its People First Initiative by suspending defaults on Installment Agreements, delaying account transfers to private collection agencies, and other responses.
Some September Child Tax Credit payments have been delayed. CNN reports that some parents complained they did not receive the CTC payments they expected on September 15. In August, the IRS reported that fewer than 15 percent of families who expected direct deposit payments received paper checks instead. It’s not clear whether that problem has been resolved. The IRS says it is looking into the September situation.
Could collective defined contribution plans improve retirement plans for both employers and workers? A new TPC paper by Mark Iwry, David John, Christopher Pulliam, and Bill Gale examines the opportunities and challenges with implementing CDCs in the United States. CDC’s are hybrid defined benefit and defined contribution plans that can mitigate risk for both workers and employers. They identify several challenges but conclude that adding CDC features to either a conventional defined benefit plan or a 401(k) could improve outcomes for workers, retirees, and employers.
How do we solve the problems of small retirement accounts? Workers who frequently change jobs often collect multiple small retirement accounts such as 401(k)’s. They are more likely to cash out or lose track of small accounts and administrative and management fees often eat away at those modest balances. TPC’s Bill Gale shares findings from a new paper that offers solutions, including reforming rollover and account consolidation rules; depositing savers credit contributions directly into the saver’s account; making it easier to find and consolidate lost accounts; and creating a single portable retirement account that workers can take from job-to-job.
Call for papers for the 2022 IRS/TPC Joint Conference on Tax Administration. The 2022 conference takes place next June 16. Topics may include measuring and influencing taxpayer compliance, estimating taxpayer compliance costs, complexity, administration, and understanding taxpayer behavior. Learn more here. Proposals for papers are due on December 1. For more information about, including previous conference programs and papers, visit the IRS website.
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].