WASHINGTON, D.C. — Congressman Eugene Vindman (D-Va.-07) and Congresswoman Young Kim (R-Calif.-40) introduced a bipartisan bill to resolve a problem in the U.S. tax code that unfairly penalizes American taxpayers waiting on delayed tax refunds. This would save Americans money and time.
The Cutting Paperwork for Taxpayers Act would eliminate extra taxes and forms on delayed tax refunds for individual filers and small businesses across Virginia and the United States.
“The cost of living is too damn high, and I’m working hard to change that. This common-sense, bipartisan bill would put money back in your pocket. Families who file their taxes on time and are owed a refund should get their money hassle free,” said Vindman. “I’m proud to team up with Congresswoman Kim on this effort to make life easier.”
“Taxpayers shouldn’t have to foot the bill for inefficiency at the IRS,” said Kim. “I’m proud to help lead this bipartisan bill to cut red tape at the IRS and save working Americans time and money. I will always fight to ensure our federal government works for taxpayers, not against them.”
BACKGROUND
When the Internal Revenue Service (IRS) is delayed by more than 45 days in providing a tax refund, interest begins accumulating on the refund. If this interest exceeds $10, the taxpayer will receive a separate 1099-INT form and have to pay taxes on that interest in the following filing season, creating a financial and administrative burden for taxpayers — whose refunds were delayed through no fault of their own.
Specifically, The Cutting Paperwork for Taxpayers Act would remove this requirement and designate the interest that accumulates on a late tax refund as non-taxable income. In doing so, it would spare millions of individual filers and small businesses the cost and hassle of having to report their interest as additional income on a separate form.
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