The IRS has announced that the 2022 tax filing season is going much more smoothly than the past three years, with 87% of calls being answered since January. The IRS Commissioner Danny Werfel noted that some people may have missed the deadline in 2020 due to the pandemic, and there are still unclaimed refunds from 2019. He also reminded people that some households, mostly low-income households, are not required to file a return.
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President Joe Biden and House Speaker Kevin McCarthy have reached an agreement to suspend the debt ceiling and prevent the nation from defaulting on its debts, but the deal has been met with criticism from both sides of the aisle. Republicans argue that the deal does not include enough spending cuts, while Democrats are pushing for more spending. The White House and congressional leaders must now convince enough lawmakers in the narrowly divided House and Senate to pass the legislation in order to prevent the nation from defaulting on its debts.
Two Massachusetts residents, Ali Jaafar (63) and his son Yousef Jaafar (29), have been sentenced to federal prison for their involvement in a massive lottery fraud scheme. The Jaafars were part of a "ten-percenting" operation that involved cashing in 14,000 winning lottery tickets over a roughly 10-year period and then lying on their tax returns to cheat the IRS out of about $6 million. Ali Jaafar was sentenced to five years in prison and Yousef Jaafar was sentenced to three years in prison, with their third son Mohamed Jaafar receiving two years of probation. The U.S. Attorney’s Office in Boston said that the sentences should serve as a warning to those who engage in similar schemes.
The IRS and Treasury Department have announced a pilot program to allow some taxpayers to electronically file and pay their taxes directly to the IRS, set to launch in early 2024. The program is a result of the Inflation Reduction Act of last year and could mark a major change in the way U.S. taxpayers deal with the revenue service. The IRS has built a prototype system and will invite some taxpayers to test it out next year, with the goal of making the filing process easier and more efficient.
The US is facing an unprecedented default as it reaches its legal borrowing limit, leading to a standoff between Congress and the White House. The recent influx of cash to the IRS has allowed it to process new and backlogged tax returns, giving policymakers a more precise picture of when the Treasury could run out of money. Republicans have proposed extending the deadline, though the White House has not made any commitments.
Key takeaways: An IRS special agent is seeking whistleblower protections to provide sensitive disclosures about the federal investigation into Hunter Biden’s taxes to Congress. The…
House Speaker Kevin McCarthy (R-Calif.) has proposed the Limit, Save, Grow Act, which would increase the debt limit by $1.5 trillion and cut government spending. The bill includes reclaiming unspent COVID-19 funds, cancelling student loan forgiveness, and rescinding new funding for the IRS. Talks between Speaker McCarthy and President Biden are expected to begin soon, as the summer deadline approaches, to avoid a potential default and its catastrophic economic consequences.
On Tax Day, President Joe Biden and First Lady Jill Biden released their tax returns for 2022, showing a total income of $579,514 and total federal and state taxes paid of $169,820. The couple donated $20,180 to 20 charities, and the IRS recommends filing electronically and using direct deposit to receive refunds quickly. Taxpayers can also use their refund to pay down debt, save for the future, or donate to charity.