Domestic Taxes

Democrats are growing more pessimistic that a bipartisan tax reform deal can get done this year.

Supporters argue the bill would close an unfair loophole that benefits online retailers over local brick-and-mortar stores.

Sen. Carl Levin (D-Mich.) said Friday that a new report shows more and more and more countries are getting tired of offshore tax avoidance.

The Organization for Economic Cooperation and Development in its Friday report said that Switzerland and 13 other countries were behind schedule when it came to sharing tax information.

Levin, a longtime critic of offshore tax avoidance, said the report showed “that the world is finally getting fed up with tax havens and offshore tax abuse.” The OECD prepared the report for a Group of 20 meeting in Washington.

The Internal Revenue Service (IRS) will send out furlough notices to its entire workforce on Monday as part of a required cut in federal spending. 

The notices detail the five furlough days where the agency will shut down entirely and will leave open the possibility of another two unpaid furlough days, as part of a draw back in spending brought on by sequestration, the National Treasury Employees Union (NTEU) said on Friday. 

"Implementation of any furlough days is a disappointing development," said NTEU President Colleen Kelley. 

"Furloughing IRS employees is further evidence of the ongoing damage sequestration is causing across the country.” said Kelley, who heads the largest independent federal union, representing 150,000 employees in 31 agencies.

Conservative groups on Thursday marked “Tax Freedom Day,” the day each year when people in the U.S. officially pay off all of what they owe to federal, state and local governments.

According to the Tax Foundation, Tax Freedom Day came five days later this year, due to higher federal taxes and higher incomes. If taxpayers were on the hook for all the government spending planned for this year, the foundation said, the freedom day wouldn’t come until May 9.

“This year, Americans will work five days later than in 2012 to pay all of their taxes. The total tax bill at all levels comes to approximately $4.2 trillion, or 29.4% of their total income,” Will McBride, an economist at the foundation, said in a statement. “That means Americans will pay more in taxes in 2013 than they will spend on food, clothing, and housing combined.”

“Harry Reid is hell-bent on bringing it to the floor," Sen. Orrin Hatch said.

Workers face charges of falsely claiming unemployment to obtain benefits including unemployment insurance, food stamps, welfare, and housing vouchers.

The IRS is having issues routing and screening the forms it asks people to submit if they suspect tax fraud, according to a new audit.

The Treasury Department’s Inspector General for Tax Administration said that two separate IRS divisions — one for wage and investments, the other for small businesses — did not have routines for reviewing the tens of thousands of forms they receive every year.

According to the inspector general, the IRS’s accounts management function also wrongly sent referrals to the small business and wage divisions around a third to 40 percent of the time.

“The IRS must ensure that it makes effective use of information from those individuals who report suspected tax fraud,” Russell George, the tax administration inspector general, said in a statement. “This is a critical component of the IRS’s enforcement efforts.”

Postmaster General Patrick Donahoe said Wednesday that he did not know of any Postal Service employees who had become sick because of poisoned letters sent to the White House and Capitol Hill.

Donahoe said the agency warned employees that the poison ricin could cause stomach problems or other ailments. Authorities have said that letters sent to President Obama and Sen. Roger Wicker (R-Miss.) tested positive for that poison.

“We talked to people to make sure that they were OK,” Donahoe told reporters after a House hearing. “That’s the regular process. We have these things that crop up every now and then.” Read more...

Senate Majority Leader Harry Reid (D-Nev.) plans to move an online sales tax bill directly to the Senate floor, skipping the committee process.

He filed a motion on Tuesday night to begin the process of putting the bill, the Marketplace Fairness Act, on the Senate calendar. The bill could come up for a vote as early as next week.

The move would snub Senate Finance Committee Chairman Max Baucus (D-Mont.), who has insisted that the legislation should go through his committee. Baucus has expressed concern with the bill, but said he would be willing to consider it as part of broader negotiations over tax reform.