The $8 Billion Blunder: How the IRS’s Delayed Deadlines Hurt Americans

The $8 Billion Blunder: How the IRS's Delayed Deadlines Hurt Americans

The IRS has announced that it will delay some tax deadlines set by Congress in the American Rescue Plan Act. According to a report by the Joint Committee on Taxation, this decision could cost the federal government $8 billion in lost revenue.

The affected tax deadlines include the repayment of excess advance premium tax credits, which are subsidies for health insurance purchased through the Affordable Care Act exchanges. The IRS said taxpayers who received too many of these credits in 2020 do not have to repay them this year.

Another deadline that is delayed is the reporting of unemployment compensation. The American Rescue Plan Act excluded the first $10,200 of unemployment benefits from taxable income for 2020, but many taxpayers had already filed their returns before the law was enacted. The IRS said it will automatically adjust these returns and issue refunds to eligible taxpayers without requiring them to file amended returns.

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The IRS also postponed the due date for some estimated tax payments for self-employed individuals and small businesses. The first quarterly payment for 2021, originally due on April 15, is now due on May 17.

The IRS said these delays are intended to relieve taxpayers facing economic hardship and uncertainty due to the COVID-19 pandemic. However, some lawmakers and tax experts have criticized the decision, saying that it creates confusion and complexity for taxpayers and tax preparers and reduces the revenue needed to fund the government’s spending programs.

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About Camelia Bhattacharyya 202 Articles
Camelia is an intern for PanAsiaBiz studying at the Amity University, Kolkata [B. Tech (biotechnology)]. She is fond of writing on Science, Health, and Biotechnology topics.