South OC Times

Washington, DC – On April 27, U.S. Representatives Young Kim (CA-40 and Abigail Spanberger (VA-07) introduced a bipartisan bill to fix a flaw in the U.S. tax code that unfairly penalizes American taxpayers waiting on delayed tax refunds.

When the Internal Revenue Service (IRS) is delayed by more than 45 days in providing a tax refund, interest begins accumulating on the refund. If this interest exceeds $10, the taxpayer will receive a separate 1099-INT form and have to pay taxes on that interest in the following filing season, creating a financial and administrative burden for taxpayers — whose refunds were delayed through no fault of their own. The Kim-Spanberger Cutting Paperwork for Taxpayers Act would remove this requirement and designate the interest that accumulates on a late tax refund as non-taxable income. In doing so, it would spare millions of individual filers and small businesses the cost and hassle of having to report their interest as additional income on a separate form.

“Filing taxes is confusing enough already. American taxpayers shouldn’t have to fill out even more paperwork due to IRS backlogs that are out of their control,” said Rep. Young Kim. “The Cutting Paperwork for Taxpayers Act will make life easier for taxpayers and close this loophole punishing taxpayers for IRS delays. I am proud to join Rep. Spanberger to introduce this bipartisan bill, and I will keep fighting for commonsense policies that  allows families and individuals to keep more of their hard-earned money in their pockets.”

“I’ve heard directly from Virginia taxpayers who are required to pay extra in taxes due to a delayed refund — and unfortunately, millions of Americans will likely face this situation this year. Backlogs and delays at the IRS shouldn’t force taxpaying Americans to fill out unnecessary paperwork, nor should they force these taxpayers to pay more to the IRS,” said Rep. Abigail Spanberger. “Our bipartisan bill would remove a hurdle for taxpayers that’s especially painful when interest rates are high. Today, I’m proud to partner with Congresswoman Kim on rectifying this issue, and I look forward to making this change for Virginians who face this undue burden. We can make it right.”

The Cutting Paperwork for Taxpayers Act is endorsed by the National Taxpayers Union.

“When taxpayers file on time but the IRS is significantly delayed in delivering a refund, taxpayers shouldn't then be taxed on the interest the IRS rightly owes them for the late refund. NTU is glad to support the bipartisan Cutting Paperwork for Taxpayers Act, and we applaud Representatives Spanberger and Kim for this pro-taxpayer initiative. When taxpayers follow the rules, so should the IRS,” said Pete Sepp, President, National Taxpayers Union.

Click here to read the full bill text.

Economy

Original source can be found here.