IRS Faces Backlog Concerns as Tax Filing Season Approaches: Florida Leads Opposition to Proposed Reporting Threshold Change
As the tax filing season draws near, the Internal Revenue Service (IRS) is sounding the alarm about a potential backlog that could cause delays in refund processing. The National Taxpayer Advocate, an organization within the IRS, recently released a report to Congress, emphasizing the pressing need to allocate resources to handle returns and issue refunds promptly.
Since November, the IRS has been cautioning taxpayers that their ability to assist with delays will be limited. A statement issued by the organization acknowledged the increased occurrence of refund delays this year and expressed empathy for the frustrations and hardships experienced by taxpayers. The Taxpayer Advocate Service (TAS) urged patience from taxpayers while they work in collaboration with the IRS to address the backlog of returns.
Florida Chief Financial Officer Jimmy Patronis has been at the forefront of opposing the IRS, particularly in response to reports that U.S. Senate Democrats are proposing a significant change to the reporting threshold, raising it from $600 to $10,000. Patronis criticized President Joe Biden’s efforts, arguing that targeting middle-class bank accounts and small businesses does not align with the administration’s aim to combat fraud and pursue billionaires.
Under the proposed plan, banks and popular third-party payment apps like PayPal, Cash App, and Venmo would be required to report account holders’ information, including deposits, withdrawals, and transactions of $600 or more. Patronis and others contend that this move could lead to increased black market activity and represents an unwarranted invasion of privacy. Patronis stressed that Floridians would not comply with the proposed regulation and would seek legal action if necessary.
Prominent figures in Florida’s banking industry, including the President of the Florida Bankers Association, Alex Sanchez, voiced their opposition, describing the proposed reporting requirement as a significant infringement on privacy rights. Republican U.S. Senator Marco Rubio echoed these concerns, highlighting the potential threat to the privacy of hardworking Americans who have trusted their local banks for years.
Patronis has taken proactive measures to shield Floridians from the proposal, including requesting the involvement of Florida’s Office of Financial Regulation (OFR) and directing the Department of Financial Services to explore methods of exempting Floridians from the plan if it becomes law.
While the proposal has a lengthy legislative journey ahead before potentially becoming law, states like Florida are gearing up to challenge it every step of the way. The opposition stems from concerns about privacy invasion, the potential for increased black market activity, and the perceived targeting of middle-class individuals and small businesses.
As the tax filing season approaches, the IRS is grappling with a possible backlog, prompting concerns over delayed refunds. Meanwhile, Florida is leading the charge against a proposed change to the reporting threshold, citing privacy concerns and an unjust burden on the middle class. The path forward remains uncertain, but states like Florida are poised to contest the proposal throughout the legislative process.