MORE ON THOSE VIBES: Wyden responded to Cornyn on social media on Friday, focusing on his bill’s crackdown on the Employee Retention Credit — and arguing that Senate Republicans would have to own the blame if this chance to end the questionable claims of that pandemic-era incentive went by the wayside. That’s perhaps a fitting response from Wyden: Friday was also the deadline for businesses to disavow erroneous ERC claims and face more modest penalties than they might if the IRS pursues them with an audit or even criminal investigation. The agency said that it had recovered some $225 million from more than 500 companies through that program, as Pro Tax’s Brian Faler noted Friday. That number almost certainly will rise — the IRS still has to wade through hundreds more applications for the amnesty initiative — and, in all, the tax collector has assessed or clawed back some $1 billion in wrongful ERC claims after it placed a moratorium on new claims last year. Still, that’s a far cry from the $78 billion that would be saved through the Wyden-Smith plan, and might underscore why IRS chief Danny Werfel has asked Congress to give his agency more tools to battle the flood of claims that it’s still receiving. Why don’t you like this? Some Senate Republicans, like Thom Tillis of North Carolina, are downright hostile to the Wyden-Smith plan’s use of the ERC crackdown as an offset, while others at least don’t seem to think the savings from the move is attractive enough to offset their other concerns about the bill. With that in mind, the Bipartisan Policy Center released a new analysis on Friday that tries to make the case for the Employee Retention Credit provisions as a “necessary and worthy offset.” The group’s Caroline Osborn and Andrew Lautz argued that it’s past time to end a pandemic relief measure, particularly with so many questionable claims still pouring in — and that the $78 billion in the Wyden-Smith bill are legitimate savings There’s a 2025 angle for all this, too, when Democrats and Republicans battle over those numerous expiring provisions from the 2017 GOP tax law. “The ERTC provisions in the current tax bill are an example of lawmakers working together to find responsible and robust fiscal offsets,” Osborn and Lautz wrote, adding that “Congress should build on this progress in the months and years ahead.” FIRST LOOK: There are now three weeks left in this tax filing season, during which a lot of people have been paying attention to how well the IRS’s Direct File pilot program is working. By the latest count, the IRS says that more than 50,000 people have at least started a tax return on its portal, as the Biden administration has sought to build Direct File out slowly. Now, the progressive group Groundwork Action, which has been a big supporter of the government-run filing portal, is trying to give Direct File one last push during this filing season. The organization is launching a six-figure ad campaign that will reach all dozen states where the Direct File portal is currently operational — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. “We’re launching this advertising campaign to ensure taxpayers know that Direct File is an option for them this tax season and to signal to lawmakers that providing a free filing option through the IRS is popular,” said Igor Volsky of Groundwork Action. Meanwhile, conservative groups and the private tax preparation industry have continued to knock Direct File as a bad idea — arguing, among other things, that it’s a wasteful use of government resources. (Worth noting: Given how narrowly Direct File is starting this year, these arguments certainly will bleed into next year’s filing season as well.)
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