Next week on Capitol Hill. The House Ways & Means Social Security Subcommittee will hold a hearing Tuesday, April 16, on the windfall elimination provision and government pension offset. The full committee will hold a hearing Tuesday on President Biden’s trade policy with US Trade Representative Katherine Tai. On Wednesday, April 17, Tai will appear before the Senate Finance Committee to discuss the Biden administration’s trade agenda.
Senate report shows scam victims face huge tax bills on stolen money. The Senate Special Committee on Aging released a report on victims of scams, including retirees from Pennsylvania, Ohio, Florida, Utah, and California, who now face large tax bills on money stolen from them. In one such case, a scammer posing online as a Social Security Administration official stole $765,000 from one Pennsylvania retiree. The victim was tricked into withdrawing his retirement funds and buying cryptocurrency. He now owes the IRS $220,000 because the money came from a pre-tax retirement account and appealed to Congress to pass legislation to provide relief. In 2017, the Tax Cuts and Jobs Act scaled back or eliminated many itemized deductions, including personal casualty loss deductions from theft.
Steuerle: President Biden’s proposed First-Time Homebuyer Tax Credit has room for much improvement. TPC’s Gene Steuerle agrees with colleague Howard Gleckman that Biden’s proposal is a solid first step toward increasing homeownership. Gene argues that for the credit to succeed, it would require permanent reporting mechanisms for real estate agents, lawyers, banks, or others involved in property transfers. It also would require the IRS to track taxpayers who secure first-time homebuyer credits to ensure compliance. The credit’s design would also benefit from encouraging not just purchases of homes but also the retention of savings and buildup of equity.
Pennsylvania bill would offer a tax deduction for organ donations. The state’s House Committee on Finance will soon consider HB 2179, reports TaxNotes (paywall). The bill would allow a taxpayer to deduct from state taxable income once in their lifetime up to $12,000 if, while living, the taxpayer or their dependent donates one or more of their organs to another human and incurs unreimbursed expenses, including travel, lodging, lost wages, and medical costs. The deduction would be taken in the same year as the donation, and could not be used to reduce taxable income below zero.
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