Tag: IRS

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IRS Will Require Filing Tax Return To Qualify For Stimulus Check

(image via Pixabay)

The Internal Revenue Service has announced Americans will need to file a “simple” tax return even if they don’t owe taxes in order to receive a coronavirus stimulus check.

From the Washington Post:

The Trump administration is requiring Americans on Social Security to file a tax return to receive the $1,200 coronavirus payment, an added step that is causing confusion and could prevent millions from easy access to relief.

Many lawmakers and advocates for the poor say filing a tax return shouldn’t be necessary for people on Social Security since the government already knows how to send this population monthly checks. The $2.2 trillion aid package said that if someone has not filed a 2019 or 2018 tax return, the U.S. Treasury should get their information from Social Security, if applicable.

But, the Internal Revenue Service posted a notice on its website on Monday, instructing Social Security recipients to file a “simple” tax return, which will be available soon.

“People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment,” the IRS said. “Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.”

Seventeen and eighteen-year-olds won’t qualify for stimulus checks as well because the legislation follows the tax-code definition of “child” that states a “qualifying child … has not attained age 17.” In other words, many high school juniors and seniors and their families won’t receive a $500 check from the stimulus bill.

Plus, many immigrants won’t qualify because you will need a valid social security number to receive a check.

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Warren Proposal Could Mean Tax Refunds For Married Same-Sex Couples

Massachusetts Senator and presidential hopeful Elizabeth Warren has proposed a plan to allow married same-sex couples to possibly recoup some of the taxes they paid before the federal government recognized marriage equality.
Sen. Elizabeth Warren (D-MA)

Massachusetts Senator and presidential hopeful Elizabeth Warren has proposed a plan to allow married same-sex couples to possibly recoup some of the taxes they paid before the federal government recognized marriage equality.

Warren recently re-introduced her proposal, titled ‘The Refund Equality Act,’ in the U.S. Senate.

Originally introduced by Warren in 2017, the goal of the legislation would be to allow same-sex couples to file amended tax returns in order to collect funds they paid when they were legally married but not allowed to file as married couples.

Current law allows Americans to file amended returns reaching back as far as three years, but Warren’s proposal would give same-sex married couples the right to re-file returns for the entire period the couple has been married.

In a statement, Warren said, “The federal government forced legally married same-sex couples in Massachusetts to file as individuals and pay more in taxes for almost a decade.”

In 2004, Warren’s state of Massachusetts became the first in the nation to recognize same-sex marriage.

But it wasn’t until the 2013 ruling by the U.S. Supreme Court, U.S. v. Windsor, that the federal government (including the Internal Revenue Service) allowed LGBTQ married couples to access some of the tax advantages of being married.

For instance, I married my husband in 2003 in Toronto, Canada. While it was a beautiful, emotional day in my life, once we returned to the U.S. it was (in legal terms) largely ceremonial as it wasn’t recognized at home.

Michael and I getting married in Toronto in 2003

Living in California at the time, other than my using the actual term ‘husband’ to refer to my guy, it didn’t count for much in terms of legal standing until the state Supreme Court ordered same-sex marriages recognized in 2008.

Proposition 8 interfered with that, but after a long back and forth, we were allowed to keep our legal status. But, that’s another story…

But, as our marriage wasn’t recognized by the federal government, we continued to file our tax returns as “Single.”

Until – the Windsor decision.

Our accountant did take advantage of the new filing status, and I can tell you it made a BIG difference in our taxes.

CNBC reports that “married couples have access to higher standard deductions: $24,400 for joint filers in 2019, compared to $12,200 for singles.”

Additionally, couples who file jointly enjoy wider income tax brackets compared to singles.

That’s not to say every couple would benefit financially from refiling their returns.

Known as the “marriage penalty,” two spouses who have similar incomes might end up in a higher tax bracket.

But in the case of married couples where one spouse makes more/less than the other, the joint tax bill could be lower.

The Joint Committee on Taxation reported last week that perhaps $57 million could be reclaimed under Warren’s legislation.

Rep. Judy Chu (D-CA) has introduced the companion bill in the House as well.

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IRS Memo Draft Indicates Trump Tax Returns Have To Be Given To Congress

Donald Trump

While Treasury Secretary and Trump toadie, Steven Mnuchin, says he’s refusing to turn over Donald Trump’s tax returns because he wants to kiss Trump’s butt Congress doesn’t have a ‘legitimate reason’ for them, it turns out the IRS has already drafted a memo that finds the returns pretty much have to be given to Congress.

From The Washington Post:

A confidential Internal Revenue Service legal memo says tax returns must be given to Congress unless the president takes the rare step of asserting executive privilege, according to a copy of the memo obtained by The Washington Post.

The memo contradicts the Trump administration’s justification for denying lawmakers’ request for President Trump’s tax returns, exposing fissures in the executive branch. Trump has refused to turn over his tax returns but has not invoked executive privilege. Treasury Secretary Steven Mnuchin has instead denied the returns by arguing there is no legislative purpose for demanding them.

But, according to the IRS memo, which has not been previously reported, the disclosure of tax returns to the committee “is mandatory, requiring the Secretary to disclose returns, and return information, requested by the tax-writing Chairs.”

Even when it comes to ‘executive privilege,’ the Post points out that “is generally defined as the president’s ability to deny requests for information about internal administration talks and deliberations.”

Trump’s taxes prior to taking office would not fall under that definition.

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CNN Anchor Asks For Proof Donald Trump Is Being Audited

Now here’s something we haven’t seen before.

For a year, Donald Trump has told the media that he would be happy to release his tax returns save for the fact he’s being audited by the IRS.

The IRS has said repeatedly that their office has no problem with him releasing his tax returns. Trump maintains that after the audit is complete he will release them.

Of course, he could release earlier returns like from the year 2008 which is not being audited. Trump declines to release anything.

Today, CNN New Day  anchor Alisyn Camerota asked again when the tax returns would be released. Trump campaign manager Kellyanne Conway repeated “after the audit.”

But then something unusual happened, in a followup question Camerota asked if the campaign would provide some kind of documentation that an audit is actually occurring.

“Has Donald Trump, or will he, release anything from the IRS — a letter from the IRS — proving that he’s under audit?”

Conway had to ask Camerota to repeat the question, clearly needing to buy time to figure out what to say.

She eventually came up with this: “I don’t know. Why? In other words — why, why are you — Are you calling him a liar? Are you calling him a liar?”

Watch below:


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Republican House IRS Investigation Finds No Connection To White House

Congressman Darrell Issa, who led IRS investigation which showed no connection to White House

A House Republican investigation looking into possible IRS violations released right before the Christmas holiday reveals no link to the White House in the tax-exempt status scandal.

The report says conservative groups were given improper scrutiny for more than two years from 2010 to 2012. It says senior IRS officials covered up the misconduct and misled Congress about it.

The report specifically faults eight senior IRS leaders who “were in a position to prevent or to stop the IRS’s targeting of conservative applicants.”

The eight include former Commissioner Douglas Shulman, former acting Commissioner Steven Miller, and Lois Lerner, who used to head the division that processes applications for tax-exempt status.

But so far, investigators have not released any documents showing that anyone outside the IRS directed the agency to mistreat conservative groups or even knew it was going on.

It’s common in politics to release news right before the holidays or late on Friday afternoons as most people aren’t paying close attention to the news cycle. Clearly, Issa doesn’t want a wide audience to know his investigation clears the White House of any wrongdoing.

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Happy Endings – Edie Windsor and her $638,000 IRS refund

In all of the hoopla over Edie Windsor’s big win at the US Supreme Court, it’s possible we lost focus on why she even started the lawsuit that changed so many of our lives.

 Her fight with the IRS.

From CNN:

Normally, surviving spouses are entitled to inherit the estate of their late husband or wife tax free.

But because DOMA only recognized marriage between a man and a woman as legitimate for the purposes of federal law, same-sex spouses have not been entitled to the same privilege.

As a result, Windsor had to pay the federal government roughly $363,000, as well as $275,000 to New York state, where estate tax rules track the federal ones.

That money has been in limbo since Windsor sued to get it back in November 2010. Her case first went before a federal trial court judge in New York, then to the Second Circuit U.S. Court of Appeals, and finally to the U.S. Supreme Court.

Windsor will also be paid interest on her refunds. Paul, Weiss, the law firm that represents her, estimates she will receive about $45,000 in interest on her federal refund and $25,000 on her New York State refund.

The other good news for the 83-year-old Windsor? Her lawyers won’t be getting a cut because Paul, Weiss took the case pro bono.

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ICYMI: Acting IRS Commissioner resigns amid 501(C) scandal

According to USAToday, President Obama will name a new acting IRS commissioner by the end of this week:

Obama said on Wednesday that he’s accepted the resignation of acting Internal Revenue Service Commissioner Steven Miller in the aftermath of revelations that agency officials were putting extra scrutiny on Tea Party groups’ applications for tax-exempt status.

The official did not name who the replacement will be, and spoke on the condition of anonymity because the president has yet to make the personnel announcement.

In brief comments Wednesday evening after discussing the Internal Revenue Service controversy with Treasury Secretary Jack Lew and Deputy Secretary Neal Wolin, Obama vowed to take decisive action to ensure that the situation would not be repeated.

“It’s inexcusable and Americans are right to be angry about it and I am angry about it,” Obama said. “I will not tolerate this kind of behavior in any agency, but particularly the IRS given the power that it has and the reach that it has in all of our lives.”

President Obama went on to say that installing new leadership at the IRS was the first step to restoring confidence in the IRS.