IRS Delays Tax Filing Deadline

By Yuval Rosenberg

IRS Delays April 15 Tax Filing Deadline

Tax day is getting delayed.

Facing a
huge backlog of unprocessed tax returns and
growing calls from accountants and lawmakers to extend this year’s
filing period given the changes to the tax code in President
Biden’s Covid relief plan, the Internal Revenue Service is pushing
back the April 15 deadline to May 17.

"This continues to be a tough time for many people, and the IRS
wants to continue to do everything possible to help taxpayers
navigate the unusual circumstances related to the pandemic, while
also working on important tax administration responsibilities," IRS
Commissioner Chuck Rettig said in announcing the delay. "Even with
the new deadline, we urge taxpayers to consider filing as soon as
possible, especially those who are owed refunds."

Lawmakers of both parties had pressed the agency to extend the
deadline after the $1.9 trillion American Rescue Plan was passed
earlier this month, requiring tax preparers to update their systems
and tasking the IRS with sending out another round of relief
payments even as it processes annual returns.

“This extension is absolutely necessary to give Americans some
needed flexibility in a time of unprecedented crisis,” House Ways
and Means Committee Chairman Richard Neal (D-MA) and Oversight
Subcommittee Chairman Bill Pascrell, Jr. (D-NJ) said in a
statement. “Under titanic stress and strain, American taxpayers and
tax preparers must have more time to file tax returns.”

The IRS had pushed back the start of this year’s tax
season to February 12, about two weeks later than usual,
compressing what promised to be a complicated filing year even
before the latest Covid relief law was enacted.

Number of the Day: $242 Billion

The Treasury Department and IRS said
Wednesday that they have sent about 90 million direct payments so
far totaling more than $242 billion under the latest Covid relief
law. That’s more than half of the $410 billion in payments approved
as part of the new law. While most of the payments so far were made
by direct deposit, Treasury said it also sent out about 150,000
checks worth approximately $442 million.

You can check the status of your payment by using the
Get
My Payment tool at the IRS website.

Quote of the Day

“Anybody making more than $400,000 will see a small to a
significant tax increase. If you make less than $400,000, you won't
see one single penny in additional federal tax.”

– President Biden, in an
interview with ABC News, reiterating his campaign
pledge to not raise taxes on people making under $400,000 annually.
Asked how he would get Republicans to vote for a tax hike, Biden
said, “I may not get it, but I'll get the Democratic votes for a
tax increase” — and went on to say that he supports
filibuster reform that would require members to
speak on the floor to delay action on a bill.

Warren, Sanders Want to Tax Companies With High CEO Pay

Sens. Bernie Sanders (I-VT) and Elizabeth Warren (D-MA)
introduced a bill Wednesday that seeks to rein in what they see as
excessive CEO pay.

Under their proposal, companies that pay their CEOs more than 50
times the average employee would face higher tax rates, starting
with a surtax of 0.5% that increases to 5% for companies that pay
their CEOs more than 500 times the average employee. Backers of the
plan say it could raise as much $150 billion over 10 years.

Some Republicans Decry Their Party’s Lack of Effective Pushback
on Covid Relief

Some conservatives and Trump Republicans are suggesting that the
GOP botched its attacks on Democrat’s massive Covid relief bill,
Politico
reports:

“[I]n interviews with top GOP operatives, Trump confidantes,
and congressional aides, there was a common refrain that the party
could have done more to frame it for the public. Instead, periodic
claims that the bill was bloated with progressive add-ons and
bailout money for blue states were overshadowed by a more
relentless focus on the culture wars du jour.”

Deficit dilemma: Some Republicans told Politico that part
of the party’s messaging struggle about the popular relief bill was
rooted in its recent support for deficit spending and relief
packages that included similar elements to those in the Democratic
bill. Republicans attacked the Biden plan as a liberal wish list
and criticized the president for what they said was a lack of
bipartisanship. They didn’t focus much on the package’s
deficit-raising effects.

“Republicans lost credibility on that issue during the Trump
years, especially the first couple years when we had the power to
do something about it,” Brendan Steinhauser, a Republican
consultant and former campaign manager to Texas Sen. John Cornyn,
told Politico. “There was no interest in doing anything about it.
It was just, ‘let’s not even talk about spending or the debt or
deficit or anything like that.’”

Those challenges were likely made worse by the giant shadow of
Trump himself, who had publicly called for larger stimulus
payments, slammed Republicans who opposed them and then served as
an added distraction because of his impeachment trial.

Republicans haven’t stopped fighting the relief plan:
“Ohio Attorney General Dave Yost sued the Biden administration
Wednesday over its $1.9 trillion coronavirus relief package,
alleging the federal government sought to impose ‘unconstitutional’
limits on states’ ability to access some of the aid,” The
Washington Post
reports.

The lawsuit comes a day after 21 other Republican attorneys
general sent a seven page
letter to Treasury Secretary Janet Yellen
challenging the American Rescue Plan’s requirement that state
and local governments getting aid money cannot use the funds to
“indirectly or directly” offset the cost of tax cuts. The letter
argues that the limit on those governments’ ability to cut
taxes is “an unprecedented and unconstitutional intrusion on the
separate sovereignty of the States.”

The Biden administration is defending the provision. “It
is well established that Congress may establish reasonable
conditions on how states should use federal funding that the states
are provided,”
said Treasury Department spokesperson Alexandra
LaManna.

House Republicans Vote to End Earmark Ban

The House Republican conference voted 102 to 84 Wednesday to end
a ban on earmarks, which allow lawmakers to designate funds for
specific projects within their districts.

Banned from Congress during the rise of the tea party in 2011,
earmarks have long been associated with questionable spending deals
like the infamous “bridge to nowhere” in Alaska, as well as
scandals involving corrupt lobbyists. But Democrats, arguing that
earmarks would help restore the power of the purse to the
legislative branch, plan to bring them back this year, albeit with
a new name (“congressionally directed spending”) and a variety of
new rules intended to limit the potential for corruption.

House Republicans debated the issue behind closed doors, with
some speaking in favor of maintaining the ban. Members of the House
Freedom Caucus, which is ideologically aligned with the tea party
conservative movement, were reportedly strongly opposed to ending
it, decrying the practice as “legislative bribery.”

“I think we've got $30 trillion in debt and people are tired of
the swamp and the GOP should be ashamed of itself, if it jumps
headfirst right back into the swamp,” Rep. Chip Roy (R-TX), a
member of the caucus,
said.

But others said that refusing to use earmarks would allow the
Biden administration to exert greater influence on spending while
putting Republicans at a disadvantage during the budgeting
process.

“The Democrats want to bring [earmarks] back,” House Minority
Leader Kevin McCarthy (R-CA)
said. “There's a real concern about the
administration directing where money goes. This doesn't add one
more dollar. I think members here know what's most important about
what's going on in their district, not Biden.”

The GOP House vote leaves Senate Republicans as the only group
that is sticking with the ban, at least for the time being. Senate
Appropriations Chairman Patrick Leahy (D-VT) said he is willing to
dedicate half of the funds allocated for earmarks to Republicans,
but it’s not clear they’re interested in taking him up on the
offer. Republican senators voted on a permanent ban on earmarks in
2019, and some have indicated they want to maintain it.

Senate Minority Leader Mitch McConnell (R-KY) spoke out
against the revival of earmarks last month. “I represent the entire
conference and I can tell you the overwhelming majority of the
Republican Conference in the Senate is not in favor of going back
to earmarks,” he
told Fox News. “I’m assuming those people — even
if Democrats craft the bill so that those are permitted — will not
be asking for them.”

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