Tax relief

A top House Democrat suggested Thursday that his party scale back eligibility for child tax credits as a way to unlock President Joe Biden’s stalled economic agenda.

After coming under pressure from an array of tax and accounting professional associations and hundreds of members of Congress, the Internal Revenue Service said Thursday it would suspend issuance of some of its automated penalty notices to taxpayers, but tax and accounting groups say the agency isn’t providing enough relief.

The service is under pressure from lawmakers to stop penalties and pause automated collections from taxpayers who have been caught in a processing backlog.

A group of Senate Democrats want the expanded monthly Child Tax Credit payment as the “centerpiece” of any revived tax and spending agenda.

Millions of American families came to depend the advanced credit amid a surge in the cost of living and the continued spread of COVID-19.

The Internal Revenue Service added more information on the Recovery Rebate Credit, providing extra details on its Frequently Answered Questions document about finding the first Economic Impact Payment amounts to calculate the credit.

The service has updated the information on its FAQ page for the CTC and advance CTC payments.

Victims of Hurricane Ida in six states now have until Feb. 15 to file various individual and business federal returns and make tax payments.

The IRS is now offering later deadlines to more areas hit by storms, tornadoes and flooding.

The IRS has extended filing and payment deadlines for them until May 16.

The service agreed to ease its policies for low-income taxpayers who are trying to settle their tax debts and still get tax refunds.

The service is sending notices to taxpayers who deferred their Social Security taxes last year, reminding them that half the taxes will be due by the end of this year.

The Internal Revenue Service is giving victims of Hurricane Ida in some parts of Mississippi until Jan. 3, 2022 to file their individual and business tax returns, although the Nov. 1, 2021 deadline still applies to the rest of the state.

The Internal Revenue Service’s Taxpayer Advocate Service helped thousands of taxpayers last year with economic impact payments under the CARES Act, but it took months to start addressing them, often with the wrong cases.

The Internal Revenue Service has been extending tax relief to Americans affected by natural disasters like hurricanes and wildfires, but recent legislation could make it easier to qualify for federal tax relief.

An open letter last week expressed bipartisan opposition to proposals to retroactively end the credit before the end of the fourth quarter.

Farmers and ranchers may have another year to defer tax on gains from sales.

The Internal Revenue Service mailed out nearly 90,000 premature notices and demands for overdue taxes to taxpayers last year, even though the filing date had been extended.

Lawmakers proposed bipartisan legislation in the Senate to allow the Internal Revenue Service to postpone filing deadlines when a state-level disaster declaration is issued, rather than waiting for the federal government.

The service warned Thursday of an issue that’s affecting business taxpayers who need transcripts for requesting COVID-19 employment tax relief.