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A Storm, A Warning, And Maybe A Credit


A perfect storm, and 35 million unprocessed returns. In her annual objectives report to Congress, National Taxpayer Advocate Erin Collins finds that the IRS still had 35.3 million unprocessed returns at the end of the 2021 filing season, four times what it had at the end of the 2019 filing season. In something of an understatement, Collins wrote, “The combination of pandemic-induced shutdowns, three rounds of Economic Impact Payments, challenges with paper return filings, a backlog of over 35 million suspended 2020 returns, and the responsibilities of implementing new legislation resulted in a challenging 2021 filing season.” 

PWBM: Bipartisan infrastructure deal would initially increase debt, but boost GDP in the long run. A new Penn Wharton Budget Model analysis estimates that in the first decade, gross domestic product (GDP) would be about the same as under current law, but debt would increase by 0.4 percent because new spending would outpace revenue increases. By 2050, the plan would increase GDP by 0.1 percent and decrease debt by 0.9 percent. 

Biden to EU: Drop your digital tax. Politico reports the Biden Administration is urging the European Union to at least delay its proposed digital tax, warning that it could jeopardize broader OECD talks on a global tax regime. The US wrote, “The EU Digital Levy, even if different from previous digital services taxes, threatens the work undertaken via the OECD/G20 process. We urge you to work with the European Council and the European Commission to delay the release of the EU Digital Levy proposal.”

Today: Tax-related criminal charges against the Trump Organization and its CFO. The Manhattan district attorney is expected to file a first round of charges after a three-year probe into the Trump Organization and its CFO Allen Weisselberg. They’ll be charged with evading taxes on fringe benefits but former President Trump is not expected to be charged, reports The Wall Street Journal (paywall). The case may be an attempt to pressure Weisselberg to cooperate in a wider investigation against the firm and, perhaps, Trump himself.

Can the tax code help low-income students to receive higher education? That’s the question posed at this week’s House Way’s and Means Oversight Subcommittee hearing. University of Michigan’s Susan Dynarski recommended a single, refundable tax credit to pay tuition, fees, and room and board. The single credit at enrollment would reduce complexity and help low-income families receive the maximum benefits.

Later this month, a conference series on taxation and gender. TPC’ Elaine Maag will be speaking as part of a series of events on tax and gender issues hosted by the American Tax Policy Institute. Co-sponsors include the American Bar Association Tax Section, American College of Tax Counsel, National Tax Association, and National Women’s Law Center. Learn more and register here

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 dailydeduction@taxpolicycenter.org.



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