Tax Evasion and Sneaky Persuasion
What will become of the House-passed bipartisan tax bill? The Senate returns this week, and while the fate of the bill is unclear, business groups have begun a full-court press urging its passage. Some Senate Republicans remain concerned about the bill’s expansion of the Child Tax Credit.
Werfel: Tax evasion by millionaires and billionaires costs more than $150 billion in revenue each year. IRS Commissioner Danny Werfel told CNBC about its latest efforts to combat tax evasion by wealthy individuals, which he said both adds to deficits and the perception of the tax system as unfair. Earlier in the week, the IRS announced it will audit the use of corporate jets by businesses and high-income individuals. Werfel told reporters that the new audit campaign could generate a “significant amount of revenue.”
FTC: Tax prep firm, by deleting data, directed customers to pricier services. H&R Block markets its tax prep software as free but at times pressures customers into choosing pricier products they don’t need, the Federal Trade Commission (FTC) alleged in an administrative complaint. In particular, customers on the online platform who attempt to downgrade what they purchase can face “an obstacle course of tedious challenges,” the FTC said in a press release. “When consumers choose to downgrade, H&R Block requires consumers to contact its customer support via chat or phone,” the FTC said. “Then, its system deletes all the tax data the consumers have entered, requiring them to start their tax return from scratch, creating a significant disincentive to downgrading. This stands in contrast to the upgrade process, where consumers’ data seamlessly moves to the more expensive product instantly.” According to The Hill, H&R Block Chief Legal Officer Dara Redler in a statement said that the company’s tax prep tools and services provide “a great deal of value, unmatched tax expertise, and fair and transparent pricing,” but did not mention the FTC complaint.
Meanwhile, new polling shows support for the IRS-run tax filing portal. Groundwork Action, an advocacy group promoting the IRS Direct File initiative, shared polling last week finding that 9 in 10 adults in Arizona, Georgia, Florida, New York, and Texas backed the idea of the IRS offering a free tax filing alternative. The prominent Democratic polling firm Greenberg Quinlan Rosner conducted the survey, reports PoliticoPro.
Available now: State Tax and Economic Review, 2023 Quarter 3. In the latest report, TPC’s Lucy Dadayan writes that state revenues remained sluggish in the third quarter of 2023. Total state government tax revenue collections declined 1.2 percent in nominal terms and 4.3 percent in real terms in the third quarter of 2023 relative to a year earlier. State tax revenues increased in 27 states in nominal terms, while 19 states reported year-over-year declines for the fourth quarter of 2023.
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