Here’s to the next Tax Day not being a repeat of yesterday. The IRS was unable to accept direct tax return payments yesterday, due to a technical glitch that prevented transmission between tax preparation software companies and the agency. IRS Commissioner David Kautter was about to testify before the House Oversight Committee when he learned of the problem. Top Senate Finance Committee Democrat Ron Wyden said, “While we don’t yet know what has caused this systems failure, the lack of Republican funding for the IRS to serve taxpayers will only compound the issue.” Last night, the IRS announced that its electronic filing system was up and running again. Taxpayers will be able to file through today without requesting an extension.
Who to trust, Larry Kudlow or the CBO? Kudlow, director of the President’s National Economic Council, promises that taxpayers will get more benefits from Tax Cuts and Jobs Act as the year goes on. “We're just getting started,” he assured CBS This Morning viewers. As for Congressional Budget Office estimates that TCJA tax cuts will drive the federal deficit north of $1 trillion within two years? Kudlow told (paywall) Fox News, “Very important — never believe them. They're always wrong, especially with regard to tax cuts… We're already moving towards a 3 percent growth path. I believe we will stay on that path and maybe even better.” Time will tell.
The House GOP believes time is on its side. TCJA hasn’t grown any more popular since its passage five months ago. And it’s apparently not even that interesting. But that’s not keeping GOP leadership from hoping to hold their House majority in November. Majority Leader Kevin McCarthy told CNBC that by the midterms, voters will better understand the benefits of the TCJA. And McCarthy, who hopes to replace the retiring Paul Ryan as House Speaker, wondered out loud whether tax filing day could be moved to November, to keep the issue fresh in voters’ minds. Hope springs eternal.
The Supreme Court hears oral arguments in online sales tax case. The justices questioned lawyers for both sides in South Dakota v. Wayfair. The Court will decide whether to allow states to require retailers to collect sales tax, even if they do not have a physical presence in their jurisdiction. There did not appear to be much consensus among the justices on whether to overturn the Court’s 1992 ruling in the Quill case. The Court is expected to rule by this summer.
Ivy League, other colleges begin lobbying to repeal endowment tax. Under the new tax law, over two dozen schools will pay an annual 1.4 percent tax on the net gains on their endowments. It won’t be collected until next year, but a group of colleges including Harvard and Yale is already seeking sponsors of a new bipartisan bill to repeal the tax. Alabama Republican Bradley Byrne and Maryland Democrat John Delaney introduced the bill.
Speaking of time: President Trump has requested a tax filing extension. “The President filed an extension for his 2017 tax return, as do many Americans with complex returns,” White House press secretary Sarah Huckabee Sanders said yesterday. “He will file his tax return by the extension deadline of October 15, 2018.” But apparently he still won’t make it public.
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