Latest news with #FinancialServicesandGeneralGovernmentSubcommittee
Newsweek
6 days ago
- Business
- Newsweek
IRS Warning Issued for 2026 Taxes
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Taxpayers could face significant hurdles during the 2026 tax filing season after the Internal Revenue Service (IRS) reduced its workforce by more than one-quarter in the past year, according to a new report delivered to Congress. National Taxpayer Advocate Erin Collins issued the warning on Wednesday, citing figures that show that the IRS employee headcount dropped by more than 25,000, marking the first official estimate of job losses tied to staffing initiatives under President Donald Trump's second administration. The House's "One Big, Beautiful Bill," expected before July 4, could create new complexities for the IRS, the report added. Key provisions retroactively apply to the 2025 tax year, such as disallowing Employee Retention Credit claims after January 31, 2024. The changes would require fast updates to tax forms and systems, increasing pressure on the agency's reduced staff. Erin Collins, national taxpayer advocate, speaks during a Financial Services and General Government Subcommittee hearing on "Internal Revenue Service: Narrowing the Tax Gap and Improving Taxpayer Services," on May 19, 2021, on Capitol Hill in... Erin Collins, national taxpayer advocate, speaks during a Financial Services and General Government Subcommittee hearing on "Internal Revenue Service: Narrowing the Tax Gap and Improving Taxpayer Services," on May 19, 2021, on Capitol Hill in Washington. MoreWhy It Matters The reduction of 26 percent of the IRS workforce comes as the agency prepares for new, complex tax law changes anticipated in congressional budget negotiations. Substantial staff losses and the prospect of a 20 percent reduction in the IRS budget, plus retroactive legislative changes, raise concerns about the agency's ability to process returns efficiently and deliver refunds, potentially affecting tens of millions of U.S. households and the federal government's ability to collect revenue. What To Know The IRS headcount dropped from 102,113 to 75,702 employees as of June. More than 17,500 employees accepted buyouts under the "deferred resignation program." The Trump administration's budget proposal features an additional 20 percent funding reduction for the IRS. Accounting for stripped Inflation Reduction Act supplemental funds, that represents a 37 percent budget cut compared to the previous year, the Associated Press reported. Collins wrote that "a reduction of that magnitude is likely to impact taxpayers and potentially the revenue collected." More than 80 million Americans will get tax rebates worth $2,942 on average following the 2025 filing season, the Internal Revenue Service (IRS) has said. Individual Returns Received: 140,633,000 Individual Returns Processed:138,057,000 Refunds Issued: 86,021,000 Average Refund Amount: $2,942 Refunds Issued by Direct Deposit: 81,032,000 Although Collins described the 2025 filing season as "one of the most successful filing seasons in recent memory," she warned that the IRS risks being unprepared for 2026 as a result of its reduced workforce and impending tax law changes. Collins said. "With the IRS workforce reduced by 26 percent and significant tax law changes on the horizon, there are risks to next year's filing season. It is critical that the IRS begin to take steps now to prepare," she said. Collins warned that without improved technology, IRS staffing cuts could jeopardize the success of next year's filing season She noted that important steps—such as hiring and training thousands of new seasonal and permanent staff—had not yet begun as of mid-2025. Where IRS Staffing Cuts Hit Hardest The cuts, which also resulted from a "deferred resignation program" linked to Elon Musk's Department of Government Efficiency, have particularly impacted taxpayer services, small business/self-employed divisions, and information technology teams, the tax watchdog's breakdown said. The IRS continued to struggle with an identity-theft backlog, with 387,000 unresolved cases as of June. On average, it took nearly 20 months to resolve a single case, marginally improving on previous performance. Collins called this "unacceptably long," warning that it disproportionately affects victims who rely on tax refunds for everyday expenses. What Happens Next The IRS must quickly hire and train thousands of employees and adapt its IT systems to manage new tax law requirements before 2026. The Treasury Department has requested $852 million to fund the efforts. Congressional actions on tax legislation and IRS budget proposals—expected before July 4—will determine the scale of changes and challenges for the next tax season. This article used reporting by The Associated Press.
Int'l Business Times
06-05-2025
- Business
- Int'l Business Times
Treasury Secretary Falters as Democratic Lawmaker Asks Who Pays Tariffs: 'It's a Very Complicated Question'
Rep. Mark Pocan (D-WI) [left] questioned US Secretary of Treasury Scott Bessent [right] during a Financial Services and General Government Subcommittee hearing on "Oversight Hearing of the US Department of the Treasury." During a congressional hearing on Tuesday, Rep. Mark Pocan (D-WI) was clearly unsatisfied with the stumbling response from Treasury Secretary Scott Bessent when asked who pays tariffs. Bessent stammered, eventually telling Pocan, "It's a very complicated question." Frustrated with Bessent's hesitation, Rep. Pocan interrupted him. "People pay tariffs, right?" Pocan answered himself. President Donald Trump has insisted that tariffs are a tax on other countries, but economists argue that companies, not governments, are accountable for the tax. Tariff payment is due to Customs and Border Protection when goods enter the United States, meaning American businesses must pay tariffs before they can collect their imported goods. Even with suppliers and importers taking hits to their profit margins, some of that cost will likely be passed on to consumers. While some importers will successfully negotiate lower prices with overseas suppliers, many suppliers will be unable to afford slashing wholesale prices, especially by enough to cover the 145% tariffs imposed on Chinese imports, which are higher than the goods themselves. Likewise, many American businesses will be forced to raise the price paid by consumers to recover the increased cost of importing. Fox News tells a story a small business owner who used to pay $26,000 in tariffs on goods imported from China, but now faces a $346,000 tariff due to Trump's new 104% tariff on Chinese imports. "We think that China is gonna have to pay for it. A special needs toy importer-- when... — Ron Smith (@Ronxyz00) April 9, 2025 "If we go back to the trade war in 2018, there is a body of research showing that most of the impact of these tariffs was borne by consumers and firms inside the United States," said Rodrigo Adão, a University of Chicago economics professor. High import costs do create an incentive to buy from domestic suppliers and increase US manufacturing, as heralded by the Trump administration. Both are costly, with the set up of domestic manufacturing requiring significant investments of both time and money. Originally published on Latin Times © Latin Times. All rights reserved. Do not reproduce without permission.
Yahoo
25-03-2025
- Business
- Yahoo
Democrats call for hearing with Musk on DOGE operations, funding
A group of Democrats are calling for the Financial Services and General Government Subcommittee to hold a hearing 'as soon as possible' with tech billionaire Elon Musk about his operations with the Department of Government Efficiency (DOGE) and its role in the administration's funding. The letter, signed by Democratic Reps. Steny Hoyer (Md.), Mark Pocan (Wis.), Sanford Bishop Jr. (Ga.), Glenn Ivey (Md.) and Maria Gluesenkamp Perez (Wash.), was addressed to Rep. Dave Joyce (R-Ohio), the chair of the subcommittee. The Democrats are calling on Musk, DOGE official Amy Gleason and Office of Management and Budget Director Russell Vought to testify about DOGE's 'activities and use of Congressionally authorized funds.' Musk's involvement in dismantling various federal agencies through DOGE has 'elicited serious alarms from constituents in our districts and across the country,' the lawmakers said. The Democrats said they expect the hearing to provide transparency about the use of appropriations and DOGE's personnel arrangements, as well as examining if Musk should have been nominated by President Trump and undergone a confirmation process in the Senate like other top Trump administration officials. The lawmakers are questioning what funds DOGE is using and if it should technically be considered a federal agency for its cost-cutting work, which would allow Congress to have oversight over it. Musk and DOGE have come under sharp scrutiny in recent weeks, particularly as hundreds of thousands of federal workers were fired from their positions and the administration looks to slash federal spending. Musk, who is the CEO of Tesla, has seen his Tesla stock drop, net worth drop, and been a target of protests across the country as Americans question his unelected role in the administration and the sensitive information DOGE has received access to. The Democrats are calling for an oversight hearing to 'provide transparency and substantive answers for our constituents and to consider whether more systemic reforms are needed' to address DOGE's functions, they concluded. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
25-03-2025
- Business
- The Hill
Democrats call for hearing with Musk on DOGE operations, funding
A group of Democrats are calling for the Financial Services and General Government Subcommittee to hold a hearing 'as soon as possible' with tech billionaire Elon Musk about his operations with the Department of Government Efficiency (DOGE) and its role in the administration's funding. The letter, signed by Democratic Reps. Steny Hoyer (Md.), Mark Pocan (Wis.), Sanford Bishop Jr. (Ga.), Glenn Ivey (Md.) and Maria Gluesenkamp Perez (Wash.), was addressed to Rep. Dave Joyce (R-Ohio), the chair of the subcommittee. The Democrats are calling on Musk, DOGE official Amy Gleason and Office of Management and Budget Director Russell Vought to testify about DOGE's 'activities and use of Congressionally authorized funds.' Musk's involvement in dismantling various federal agencies through DOGE has 'elicited serious alarms from constituents in our districts and across the country,' the lawmakers said. The Democrats said they expect the hearing to provide transparency about the use of appropriations and DOGE's personnel arrangements, as well as examining if Musk should have been nominated by President Trump and undergone a confirmation process in the Senate like other top Trump administration officials. The lawmakers are questioning what funds DOGE is using and if it should technically be considered a federal agency for its cost-cutting work, which would allow Congress to have oversight over it. Musk and DOGE have come under sharp scrutiny in recent weeks, particularly as hundreds of thousands of federal workers were fired from their positions and the administration looks to slash federal spending. Musk, who is the CEO of Tesla, has seen his Tesla stock drop, net worth drop, and been a target of protests across the country as Americans question his unelected role in the administration and the sensitive information DOGE has received access to. The Democrats are calling for an oversight hearing to 'provide transparency and substantive answers for our constituents and to consider whether more systemic reforms are needed' to address DOGE's functions, they concluded.
