Tax & Accounting News

TaxBuzz Top 5 - Americans Withhold Federal Taxes in Trump Protest, Washington State Passes First Income Tax Bill & More

3/13/2026

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Americans Withhold Federal Income Taxes in Protest of Trump Policies

Credit: Samuel Corum/Getty Images

A small but growing number of Americans say they are refusing to pay federal income taxes as an act of civil disobedience against President Donald Trump’s policies, particularly military actions abroad and immigration enforcement at home. Participants interviewed by The Guardian said they object to how federal tax dollars are being spent and are redirecting funds into savings accounts or mutual aid efforts instead.

The movement is being supported by advocacy groups like the National War Tax Resistance Coordinating Committee, which reports increased interest and attendance at training sessions as more Americans explore tax resistance strategies. Organizers frame the effort as part of a long tradition of protest dating back to the Vietnam War era and earlier.

Participants acknowledge the legal risks involved, including penalties, fines and wage garnishment, since federal law still requires taxpayers to file and pay regardless of political objections. Still, many say the risks are worth it as a form of protest against what they view as authoritarian governance and spending priorities.

Observers say the current wave differs from earlier tax resistance movements because it is more diverse and younger, with organizers emphasizing humanitarian priorities over military spending. The trend also comes as reduced IRS staffing has raised questions about enforcement capacity during the filing season.

The protest highlights renewed tensions around taxation and civic resistance in the U.S., underscoring how debates over federal spending and policy priorities are increasingly spilling into the tax system itself.

2. IRS Warns Millions May Miss COVID-Era Refunds Without Action Before Deadline

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Millions of Americans could be eligible for refunds tied to penalties and interest assessed during the COVID-19 pandemic — but must act soon to claim them, according to tax professionals and recent reporting. The issue stems from a federal court ruling finding that pandemic-era disaster declarations effectively paused certain tax deadlines, potentially making some penalties improperly assessed.

Under the interpretation now being tested, filings and payments from 2020 through mid-2023 may fall within the relief window, opening the door for both individuals and businesses to seek refunds or abatements for charges imposed during that period. Experts say reviewing IRS transcripts and past returns is essential to determine eligibility.

The window to file claims is limited by the statute of limitations, which generally allows three years from filing or two years from payment. Based on the ruling’s timeline, advisers say many taxpayers must act by July 10, 2026 to preserve potential refund rights.

The situation adds another layer of complexity to the 2026 filing season, already shaped by shifting rules, evolving guidance and heightened taxpayer scrutiny around pandemic-era policies. Analysts say the outcome could affect millions if courts ultimately uphold the broader interpretation of disaster-related relief.

3. Washington Lawmakers Pass Historic 'Millionaires Tax', State’s First Income Levy

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Washington lawmakers have approved a landmark 9.9% tax on personal income above $1 million, marking what would effectively be the state’s first broad income tax and a major shift for a state long known for avoiding one. The measure passed after intense debate and is expected to affect roughly 20,000 households while generating billions annually for state priorities.

Supporters say the 'Millionaires Tax' policy will make Washington’s tax system less regressive and help fund programs such as tax credits for working families, infrastructure and other public services. Proposals tied to the legislation include expanded rebates and targeted tax relief for lower-income households.

Opponents, including Republicans and some Democrats, as well as wealthy residents like Jeff Bezos and Howard Schultz are emerging as central figures in the debate. They argue the law could face constitutional challenges because Washington historically treats income as property and has rejected income taxes at the ballot box multiple times. Critics also warn higher levies could push wealthy residents and businesses to relocate.

The measure lands amid a broader national trend of states reconsidering how heavily to tax top earners, with Washington’s move now being closely watched as a potential test case for future wealth-targeted tax policy.

4. Missouri House Advances Plan to Replace Income Tax With Expanded Sales Tax

Credit: John Elk III/GettyImages

Missouri lawmakers are pushing forward a sweeping proposal to eventually eliminate the state’s personal income tax and replace it with a significantly expanded sales tax, with the measure recently clearing a key hurdle in the Republican-led House. The plan would ask voters to approve a constitutional amendment allowing lawmakers to overhaul the tax system over time.

Under the proposal, lawmakers would have three years to broaden the sales tax base to include more goods and services and eliminate many exemptions to generate enough revenue to offset the loss of income taxes. Supporters say the approach would modernize Missouri’s tax structure and boost competitiveness with no-income-tax states.

Critics warn the shift could disproportionately affect lower-income residents, since sales taxes tend to hit everyday purchases while reducing the burden on higher earners. Analysts also note Missouri’s income tax currently generates about 65% of general revenue, underscoring the scale of the proposed transition.

If approved by both chambers, the proposal would go before voters later this year, positioning Missouri at the center of a larger national debate over whether states should move away from income taxes toward consumption-based systems.

5. South Korea To Use Surplus Tax Revenue For Oil Shock Relief Budget

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South Korea plans to use excess tax revenue to fund a supplementary budget aimed at cushioning households and businesses from surging energy costs tied to the Iran conflict, Finance Minister Koo Yun Cheol said. Officials say the government’s top priority is responding quickly to the Middle East-driven oil shock while also reducing long-term dependence on imported energy.

The extra budget will focus on targeted relief measures as rising crude prices ripple through fuel, transport and broader consumer costs across the trade-dependent economy. Policymakers view the spending plan as a near-term stabilizer for growth while broader structural energy reforms continue.

The move follows strong recent tax collections, which officials say make it possible to deploy fiscal support without immediately increasing borrowing. Analysts note the approach allows Seoul to respond aggressively to economic volatility while limiting inflationary pressures tied to deficit spending.

South Korea’s response underscores how governments worldwide are increasingly turning to fiscal tools — including targeted tax-funded relief — to manage the economic fallout from geopolitical shocks and energy price swings.

The plan is now being closely watched by global policymakers as a potential model for balancing crisis response with fiscal discipline in an era of heightened market volatility.

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You agree that: (i) the Website shall be deemed solely based in California; and (ii) the Website shall be deemed a passive website that does not give rise to personal jurisdiction over Taxbuzz or CountingWorks, Inc., either specific or general, in jurisdictions other than California. These Terms and Conditions shall be governed by the internal substantive laws of the State of California, without respect to its conflict of laws principles. Any claim or dispute between you and Taxbuzz that arises in whole or in part from the Website shall be decided exclusively by a court of competent jurisdiction located in Los Angeles County, California. These Terms and Conditions, together with the Privacy Policy at https://www.taxbuzz.com/t/privacy and any other legal notices published by Taxbuzz on the Website, shall constitute the entire agreement between you and Taxbuzz concerning the Website. If any provision of these Terms and Conditions is deemed invalid by a court of competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions of these Terms and Conditions, which shall remain in full force and effect. No waiver of any term of this these Terms and Conditions shall be deemed a further or continuing waiver of such term or any other term, and Taxbuzz's failure to assert any right or provision under the Terms and Conditions shall not constitute a waiver of such right or provision. YOU AND TAXBUZZ AGREE THAT ANY CAUSE OF ACTION ARISING OUT OF OR RELATED TO THE WEBSITE MUST COMMENCE WITHIN ONE (1) YEAR AFTER THE CAUSE OF ACTION ACCRUES. OTHERWISE, SUCH CAUSE OF ACTION IS PERMANENTLY BARRED.
Liability Limitation and Usage Guidelines for TaxBuzz Ai:
Limitation of Liability:

TaxBuzz Ai is a tool designed to provide tax professionals with assistance in generating responses to tax research questions. While we strive to maintain the accuracy and reliability of the information provided, it is imperative to recognize that tax laws are dynamic and subject to change. Therefore, the use of TaxBuzz Ai should be complemented by professional judgment and consultation with legal and tax experts.

By utilizing TaxBuzz Ai, you acknowledge and agree that the information generated should not be considered as a substitute for professional advice tailored to your specific circumstances. We explicitly disclaim any liability for the consequences arising from the use of advice generated by TaxBuzz Ai. Users are encouraged to independently verify the information and seek professional advice before making decisions based on the Ai-generated responses.

Usage Guidelines:
- Professional Judgment: TaxBuzz Ai is a tool to aid tax professionals in research and analysis. It is not a replacement for professional judgment, and users should exercise their expertise when interpreting and applying the information generated.
- Consultation with Experts: While TaxBuzz Ai provides valuable insights, it is crucial to consult with legal and tax experts to ensure the advice aligns with the latest legal developments and specific nuances of a particular situation.
- Verification of Information: Users are responsible for independently verifying the information provided by TaxBuzz Ai, especially in instances where the advice generated is critical to decision-making.
- Educational Purposes: TaxBuzz Ai is intended for educational and informational purposes only. It is not intended to provide specific legal or tax advice tailored to individual circumstances.
- Non-Endorsement: The use of TaxBuzz Ai does not constitute an endorsement or guarantee of the accuracy of the information provided. Users are encouraged to corroborate the advice with other reliable sources.
By accessing and using TaxBuzz Ai, you agree to abide by these terms and acknowledge the limitations outlined herein. We reserve the right to modify these terms at any time, and your continued use of TaxBuzz Ai constitutes acceptance of any such modifications. If you do not agree with these terms, please refrain from using TaxBuzz Ai.

TaxBuzz.com is a service of CountingWorks, Inc., 2549 Eastbuff Drive., #448 208, Newport Beach, CA 92660

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