Fed Chair Powell: Full recovery will require COVID-19 containment. Federal Reserve Chairman Jerome Powell told the Senate Banking Committee yesterday that “levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery.” His conclusion: “Until the public is confident that the disease is contained, a full recovery is unlikely.”
Top economists implore Congress to pass additional relief measures. Former Federal Reserve chairs Ben Bernanke and Janet Yellen joined 130 other leading US economists signing a letter that urges “more needs to be done… If Congress fails to act, state and local governments face potentially disastrous budget shortfalls, and the Congressional Budget Office estimates the unemployment rate will likely be more than 11 percent at the end of the year.”
This year’s Tax Day is coming up quickly… is the IRS ready? NPR reports on the IRS’ backlog of paperwork as we near this year’s July 15 filing deadline. The agency largely closed for months due to the pandemic, and the overflow forced the IRS to store returns and other documents in rented trailers until employees returned to work. Former National Taxpayer Advocate Nina Olson predicts it will take the IRS 18 months to work through its backlog, which could lead to delayed refund checks.
TIGTA: IRS should pursue tax preparers who haven’t filed their own tax returns or owe back taxes. The new report from the Treasury Inspector General for Tax Administration finds that as of November 2018 more than 30,000 preparers admitted they had been tax noncompliant. More than 10,000 preparers said they did not even file their own personal tax returns. TIGTA suggests 11 ways the IRS can identify and deal with preparers who don’t file or owe back taxes and penalties.
Seattle City Council proposes yet another Amazon tax. The latest plan: Tax the city’s largest companies--the three percent of businesses with annual payroll of $7 million or more. Companies with payroll between $7 million and $1 billion would pay a 0.7 percent tax on salaries between $150,000-$499,999 and a 1.4 percent tax on salaries greater than $500,000. The city estimates this will generate about $173.5 million dollars each year. Companies with annual payroll over $1 billion would pay a 1.4 percent tax on salaries between $150,000-$499,999 and a 2.1 percent tax on salaries over $500,000. The City Council does not know how much additional revenue would come from this tax because the data are confidential. The proposed tax sunsets after ten years.
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