With help from Aaron Lorenzo and Leah Nylen
Editor’s Note: Morning Tax is a free version of POLITICO Pro Tax morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
Advertisement
— A different kind of busy: The IRS was snowed under by interest in its new web tool that aims to help people get their $1,200-plus direct payment.
— Speaking of which: Banks are lobbying Congress to make it clear that the payments are exempt from court-ordered garnishments.
— Credit Karma’s chief executive is pooh-poohing concerns that his company’s planned purchase by Intuit will lead to less competition.
HEY, LOOK AT THAT — a Thursday! We’d also love to hear from anyone who’s taken to betting on Nicaraguan soccer games.
This is one long-standing debate over the fate of giant pandas: Today marks 48 years since President Richard Nixon welcomed Ling-Ling and Hsing-Hsing, the first pandas sent to the U.S. by China, to the National Zoo.
Send us your best tips and feedback, even if you’re lounging around all day like a giant panda.
Email: [email protected], [email protected], [email protected] and [email protected].
You can also reach us on Twitter at @berniebecker3, @tobyeckert, @brianfaler, @aaronelorenzo, @POLITICOPro and @Morning_Tax.
Sign up for POLITICO Nightly: Coronavirus Special Edition, your daily update on how the illness is affecting politics, markets, public health and more.
JUST KEEP HITTING REFRESH: The IRS launched its second online portal to help people get the payments Congress authorized in the phase three coronavirus package, H.R. 748 (116), as Pro Tax’s Toby Eckert reported — and understandably, there was a lot of interest.
There was anecdotal Twitter chatter on Wednesday of people having trouble getting through or having to wait awhile, and the IRS had released a statement by mid-afternoon plugging the success of the new “Get My Payment” application and decrying as inaccurate “media reports saying the tool ‘crashed.’” (Instead, the agency says that users temporarily are sent to an online “waiting room” when the site gets too busy.)
Further stats from the IRS, on a day it would have ordinarily been accepting a lot of money instead of sending a lot out: More than six million people had learned about their payment status through the portal by the afternoon, and a million or so had given the tax collector their direct deposit information. (The Treasury says more than 80 million people will get payments in all this week.)
More payment updates: The federal government continues to increase the amount of people who will get their direct payment without having to file a tax return, as Pro Tax’s Brian Faler reported.
Next up: Recipients of Supplemental Security Income, a program run by the Social Security Administration to help the elderly, people with disabilities and others with little to no income. The IRS said Wednesday that people who receive SSI will get their direct payment the same way they get their regular benefits, be that through paper check, direct deposit or prepaid debit card.
Democrats, who had been nudging the Treasury Department in that direction, cheered the move. One catch for SSI beneficiaries: They will have to inform the IRS online of any dependents that qualify for a $500 payment — and quick, if they don’t want to wait to get that portion of their payment.
POLITICO Pro is here to help you navigate these unprecedented times. Check out our new Covid-19 Coverage Roundup, which provides a daily summary of top Covid-19 news coverage from across all 16 federal policy verticals as well as premium content, such as DataPoint graphics. Please sign up at our settings page to receive this unique roundup sent directly to your inbox every weekday afternoon.
DON’T MAKE US DO IT: Five trade associations for the financial services sector told lawmakers on Wednesday that — because of how the CARES Act was written — banks would basically have to garnish direct payments to satisfy creditors. “We believe it is imperative that Congress make it clear that these payments are treated as benefits subject to the federal exemption from garnishment,” the groups wrote to leaders in both chambers.
The phase three coronavirus measure did exempt those payments from being used to settle debts with federal and state governments, in almost all cases. The five banking groups wrote their letter after the liberal magazine The American Prospect dove into the issue of private-sector debts this week, citing audio in which a Treasury official told bankers that nothing prohibited them from taking the funds to pay off an old loan or something similar.
“The law makes it clear that the IRS won’t garnish the payments for other uses,” said Chuck Marr of the liberal Center on Budget and Policy Priorities. But Marr also didn’t say that banks would be forced to garnish stimulus payments for private debts, only that it was more ambiguous — much like the Prospect story put it. A group of 25 state attorneys general, almost all of them Democrats, wrote to Treasury Secretary Steven Mnuchin this week asking his department to take immediate action to ensure that private debt collectors couldn’t get their hands on stimulus checks.
DON’T WORRY ABOUT IT, I SAY: Credit Karma CEO Kenneth Lin downplayed concerns that Intuit’s $7.1 billion purchase of the personal finance company would lead to less competition for free tax-filing products, via our Leah Nylen. “We believe free is important,” Lin said in a live interview with Axios on Wednesday. “I don’t think there is any conflict. We believe consumers have a right to these products. Consumers will be better off with access to both products.”
Intuit said in February it would buy Credit Karma, which is popular among millennials and has 90 million members in the U.S. Some antitrust experts believe the deal may raise concerns because of potential overlaps in online tax prep software. Intuit’s TurboTax, the leading tax preparation software, was used to file about 28 percent of U.S. individual tax returns last year. By contrast, Credit Karma Tax has about a 3 percent market share, but usage is rapidly growing. And while Credit Karma’s tax product is free for all filers, TurboTax only offers some free filing — the company charges for those who are self-employed, own a business or have a more complicated tax return. Neither company responded to a request for comment on the status of the deal’s antitrust review.
Speaking of… ProPublica, which published a string of stories on how Intuit funneled people who would have been eligible for the IRS Free File program into paid TurboTax products, is back with a related story. Intuit’s “stimulus registration product,” Justin Elliott and Paul Kiel report, is plugged as being free but could also steer users to paid products.
YEA, ON SECOND THOUGHT: President Ivan Duque of Colombia said overhauling the country’s tax code was off the table as it battles the coronavirus, Reuters reports. Finance Minister Alberto Carrasquilla had said this week that a tax revamp was a possibility as the government seeks to solidify its finances. But Duque said such a step would basically be impossible, with Colombia’s economy expected to contract around 2 percent this year — though that’s less severe than what’s projected for Latin America as a whole. The Colombian president said in a radio interview that “for us to think about how we increase tax income is not just inconvenient but inviable,” given the problems that family incomes and smaller businesses are facing. Colombia enacted a new tax measure last year that will raise an extra 13 trillion pesos this year (more than $3 billion).
NOT A GOOD RECORD: The Commerce Department on Wednesday said retail sales fell some 8.7 percent in March, the steepest drop recorded since the government started tracking that metric in the early 1990s. And as the Pew Charitable Trusts noted, that’s probably bad news for states in general, given that sales taxes are generally one of the more stable revenue sources. But it’s a particular blow for states like Florida, Nevada, South Dakota, Tennessee, Texas and Washington, all of which get a majority of their revenues from sales tax collections. (Tennessee is the only one of those six states with an income tax, but it doesn’t have a particularly broad base.) “General sales taxes raise nearly a third of all state tax revenues nationally, and are the largest tax revenue source in 15 of the 45 states that collect them,” said Mark Robyn of Pew, before adding that the drop in retail underscores that states won’t be able to lean on the stability that sales taxes normally offer in this crisis.
You are listening live…to Supreme Court arguments about subpoenas over President Donald Trump’s tax returns. (Or you could be, come May 12.)
The global tax talks run through the Organization for Economic Cooperation and Development are on the back burner.
The NYT weighs in on what’s hitting the states.
The Swedish pop star Robyn has been nominated for five Grammys, but is yet to win one.
- Toby Eckert @tobyeckert
- Bernie Becker @berniebecker3
- Brian Faler @brian_faler
- Aaron Lorenzo @aaronelorenzo
Where"s my payment?
0 Comments: