Politico points to something that a lot of Americans know….
Ah?
The US Congress WRITES and passes the IRS tax code laws……
So THEY DID this….
The number of refunds so far this year is down by 3.3 percent, according to the latest IRS statistics that came out before Monday’s filing deadline. It was down last year too, and the year before that.
While no one is exactly sure why, some point to changes in the way people work. Others suspect it has to do with the way the government calculates how much in tax should be withheld from people’s paychecks. And the reversal of fortune could have consequences for how and whether people comply with tax laws.
“We want to make sure that people are, in fact, filing,” said Bob Kerr, a former longtime IRS official, now a Washington-based tax practitioner. “And there are a whole bunch of people who do it because it pays to do it.”
“I think this is really going to be a problem.”
Before the pandemic, about three-quarters of filers typically got refunds. Now about 65 percent do. The IRS distributed fewer refunds last year — 105 million — than it did in 2010, despite collecting 20 million more returns.
Refund dollar amounts are holding fairly steady. For those who’ve gotten one this year, the average payment is $3,011, up $133 from last year.
Some say the drop in the number of refunds going out the door is a good thing because getting one is tantamount to giving the government an interest-free loan by overpaying your taxes earlier in the year.
But refunds are touchy politically and economically.
People use them as a sort of forced savings, they interpret them as a barometer of how well they’re faring under the tax system and they look forward to big payments at tax time.
For some, it’s the largest single payment they receive all year.
Some tax vets wonder what a decline in refunds will mean for tax compliance.
Surely some people file because they feel it’s their duty, and others because they are afraid of the IRS. But the promise of a four-figure payment is a key way the tax agency, not to mention the tax prep industry, lures people to do their taxes.
“Two of every three taxpayers that are going to file by tonight’s deadline are actually owed a refund — and so it’s in your interest to get your taxes done,” IRS Commissioner Danny Werfel said in an interview Monday with CNBC. “We’re going to pay you.”
Suddenly owing the IRS can be an especially rude awakening in the wake of the coronavirus outbreak, when refunds surged as the government doled out hundreds of billions of dollars in assistance….