The Fed worries about businesses’ reactions to trade tensions. Minutes from the Fed’s June meeting, released last week, relate that American companies are scaling back or abandoning plans to expand and invest in new capital due to President Trump’s tariff actions and retaliations by other nations. The Tax Hound explores such concerns, and wonders if this is what colonial Americans had in mind when they declared independence 234 years ago.
Unpaid taxes could 86 your passport application. The Wall Street Journal explains that at least 362,000 Americans could face denial of new or renewed passports. That’s because the IRS has begun enforcing a rule passed in 2015 that requires the agency and the State Department to deny or revoke passports for anybody with more than $51,000 of overdue tax debt. National Taxpayer Advocate Nina Olson recommends that the IRS warn debtors 30 days before the agency sends their names to the State Department. Right now, those who owe taxes have no time to resolve their debt before passport denial.
Delaying tax refunds means families have less money for daily living expenses. TPC’s Elaine Maag tells the story. The Protecting Americans from Tax Hikes (PATH) Act of 2015 required the IRS to delay tax refunds until at least February 15 for those claiming the earned income tax credit (EITC) or additional child tax credit (ACTC). The IRS needs the time to improve compliance. The provision took effect in 2017, and postponed refunds for about two weeks for many low- and moderate-income taxpayers. New research from the Federal Reserve shows that purchases from retail and grocery stores slowed at the same time.
Dem report: TCJA helps real estate developers, hurts homeowners. The House Oversight and Government Reform Committee ranking member Elijah Cummings (D-Md.) released a report with a new estimate from the Joint Committee on Taxation. Several tax breaks for real estate developers reduce federal tax revenue by $66.7 billion over ten years. But homeowners face caps on state and local tax deductions and interest deductions for home equity loans.
Wisconsin sets a rule for online sales tax collection. Businesses with more than $100,000 in sales or more than 200 transactions a year will collect online sales tax of 5.6 percent in Wisconsin starting in October. Businesses with fewer sales and transactions will be exempt.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
