Senate Finance Dems demand IRS answers about high-income non-filers. Following last week’s Treasury Inspector General for Tax Administration report that  the IRS did not pursue high-income people who failed to file  tax returns, Senate Finance Committee Democrats want to know why. They asked Commissioner Charles Rettig why the agency did not fully audit the non-filers; whether and how the IRS has increased collections from high-income non-filers since 2016; what resources the IRS needs to complete such audits; and why the IRS is unwilling to assign a senior manager to address the issue.

In Tennessee… The  House Finance committee wants to cut spending and create a $100 million sales tax holiday this summer to encourage residents to buy school supplies, eat out at restaurants, or buy cars. Meanwhile, the Nashville city council approved a 34 percent property tax hike, the largest in its history and the first increase since 2012. Schools and the police would receive increased funding.

In San Francisco: An “Overpaid Executive Tax?” City residents will vote on the ballot measure in November. Companies with at least $1.17 million in annual gross receipts would pay a  0.1 percent tax if their highest paid employee makes 100 to 200 times the city’s median wage. The tax increases to 1 percent of gross receipts if the top-paid executive earns 1,000 times the median. The tax would take effect in 2022.

IRS outlines changes to health care spending available under CARES Act. Agency guidance says the CARES Act allows high deductible health plans to temporarily cover telehealth and other remote care services with a small or no deductible. The CARES Act also allows various tax-advantaged accounts to reimburse menstrual care products as qualified medical expenses.

H&R Block quits Free File. Politico reports that tax prep firm will drop out of the Free File Alliance—a web-based service that allows low-income households to file federal income taxes at no cost. The program became controversial after ProPublica reported that firms were hiding the program from on-line consumers and instead steering them to paid products. Block will quit the program at the end of this filing season. No word on whether the other commercial software firms will follow suit.

And the US quits digital services talks. Treasury Secretary Steven Mnuchin has dropped out of multilateral talks aimed at setting uniform cross-border digital tax rules. US Trade Representative Robert Lighthizer confirmed the move yesterday but told the House Ways & Means Committee there is still “room for a negotiated settlement.”  In recent weeks, President Trump has threatened new tariffs on countries that impose digital taxes, which hit US tech firms especially hard.

There’s still time to register for this morning’s 10th Annual IRS/TPC Research Conference on Tax Administration. The IRS and TPC are hosting their annual conference on tax administration research today. Researchers from the IRS, other government agencies, academia, and private organizations will discuss new analyses seeking to make tax administration as effective as possible. The virtual conference begins at 9:30 am Eastern. Register 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].