Senate passes temporary spending bill through March 11. The Senate approved a continuing resolution to keep the government running through March 11. The House passed the measure last week. Without Senate action, part of the government would have shut down today.
Collins on the IRS backlog. Testifying before the Senate Finance Committee yesterday, Taxpayer Advocate Erin Collins had more detail on the backlog of IRS paperwork. Collins said the agency is working through a backlog of 17.6 million tax returns and 5.9 million pieces of other taxpayer correspondence. She recommended the agency give taxpayers penalty relief for 2020 and 2021 returns, stop sending out automated collection notices, and find a way to give raises to staff who process returns. “Paper processing remains the agency’s biggest challenge, and that will continue throughout 2022,” she warned.
Coloradans will be able to pay taxes with cryptocurrency. Gov. Jared Polis says the state will accept cryptocurrencies for tax payments and permit and license fees by the end of summer. Colorado will have to partner with a crypto company to accept and convert such payments. But there is a big catch for payers: “If you are spending appreciated cryptocurrency to pay taxes, that will trigger more capital gains — a never-ending cycle,” warned one tax professional.
Meanwhile, the FBI is forming a new cryptocurrency team. The Department of Justice announced a new unit that works closely with the National Cryptocurrency Enforcement Team, directed by prosecutor Eun Young Choi. The team will focus on criminal misuse of cryptocurrencies and digital assets.
Alabama Senate bill would exempt some retirement income from tax. Alabama are taxed on 401(k) and Individual Retirement Account distributions. The Senate bill would allow people age 65 and older to exempt up to $6,000 in such distributions beginning next year. The bill now goes to the House that passed its own bill to exempt the enhanced child tax credit, earned income tax credit, and dependent care credits received under the American Rescue Plan from state income taxes.
Updating net Social Security and Medicare benefits. A new report from TPC’s Gene Steuerle updates his annual estimates of lifetime Social Security and Medicare benefits and taxes paid by workers who retire between 1960 and 2060. While total benefits will grow over time, the taxes they pay will continue to fall short of funding the programs.
New York State Judge: New York Attorney General can question Trump and his children. After a contentious hearing, Judge Arthur Engoron ruled that Attorney General Letitia James can question former President Donald Trump, Donald Trump Jr., and Ivanka Trump as part of her civil inquiry into Trump’s business practices. Trump lawyers say he will appeal. Earlier this week, Mazars USA cut ties with the Trump Organization, retracting its endorsement of ten years’ of the firm’s financial statements.
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