House passes a revised IRS reform bill. The bill is identical to a bill that passed in April, except that it strips out a controversial provision that formalized the Free File program with commercial tax prep firms. Among other provisions, it maintains the IRS Oversight Board, establishes an independent Office of Appeals, and permanently authorizes the volunteer income tax assistance program for low-income filers. It also curbs the ability of private debt collectors to pursue unpaid taxes. The bill has bipartisan support in the Senate.
Who’ll drink to that? President Trump may put that nice Bordeaux on his tariff hit list. He told CNBC that "France charges us a lot for the wine and yet we charge them little for French wine… we’ll do something about that.” Should Trump decide to impose a tariff on French wine, it would have to apply to the entire European Union. Meanwhile, Trump reiterated his tariff threat on $300 billion in additional goods from China. Now he says he’ll impose them if the Chinese president won’t meet with him.
Wisconsin Republican senators plan a $400 million income tax cut. Senate Majority Leader Scott Fitzgerald says his caucus aims to reach the $400 million target before finishing work in the Joint Finance Committee. Democratic Governor Tony Evers already has vetoed a proposal to fund an income tax reduction with budget reserves.
California Democratic Governor Gavin Newsom ditches his water tax and edges closer to a budget deal. The governor and Democratic leaders announced outlines of a new budget. It drops Newsom’s proposed $140 million tax on residential, commercial, and agricultural water users. Newsom intended to use funds from the tax to help provide clean drinking water to all California communities that lack a reliable source. Instead, the budget would fund $133 million in clean water projects largely with proceeds from the sale of greenhouse gas emission credits.
Tune in today at 9:00 am for TPC’s event “Fighting Poverty and the Rising Cost of Living." Keynote addresses from members of Congress and an expert panel will discuss proposed changes to the Earned Income Tax Credit (EITC). Participants also will review the most effective aspects of the EITC that lift vulnerable populations out of poverty and prevent those in the middle class from falling into poverty. The discussion also will cover a newly released TPC analysis of an expanded EITC called the Cost-of-Living Refund. The event will be webcast live here.
There are new variations on old tax scams. Forbes digs into IRS warnings about the evolving methods to trick taxpayers. In the “SSN Hustle,” scammers say they can suspend or cancel your Social Security number unless you give them personal information or money. And now that taxpayers are learning that the IRS never calls, scammers are sending letters demanding payment of taxes owed to the fake “Bureau of Tax Enforcement.”
Next Thursday: 9th Annual IRS/TPC Joint Research Conference on Tax Administration. The IRS and TPC will hold the only annual conference focused on tax administration research. Researchers from the IRS, other government agencies, academia, and private organizations will discuss some of the latest analyses of ways to make tax administration as effective as possible. Space is limited, but the presentations and discussions will be live streamed 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 [email protected].
