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TaxBuzz Top 5 - IRS Hopes to Implement New Child Tax Credit Quickly, Boston Faces $1.4 Billion Tax Revenue Loss & More

TaxBuzz Top 5 - IRS Hopes to Implement New Child Tax Credit Quickly, Boston Faces $1.4 Billion Tax Revenue Loss & More

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. IRS Commissioner Says Agency Hope to Implement New Child Tax Credit Quickly

Credit: Zach Gibson/Getty Images

Less than a month ago, the U.S. House of Representatives approved the Tax Relief For American Families and Workers Act of 2024, legislation that includes an expanded Child Tax Credit. Now, IRS Commissioner Danny Werfel assured lawmakers that the agency is ready to act swiftly on implementing the bipartisan bill, emphasizing that taxpayers shouldn't delay filing. The bill currently awaits Senate action.

Per the New Hampshire Bulletin, Werfel confirmed the IRS's readiness to enacting tax code changes, stating they could begin in as little as six to 12 weeks after passage. The legislation aims to expand the child tax credit and revive corporate tax breaks, such as full expensing for domestic R&D costs and bonus depreciation for equipment purchases. Importantly, Werfel affirmed that taxpayers wouldn't need to file amended returns for adjustments, ensuring a smooth process.

However, the bill faces Senate uncertainty, with Republicans concerned about certain provisions, including a child tax credit "look-back" feature. Despite differing views, Senate Finance Committee Chair Ron Wyden aims for swift action, though no decisions have been made yet.

2. Maryland Residents Left Waiting For State Tax Refunds 

Many Maryland residents have found themselves waiting anxiously their state tax refunds, with delays attributed to the Maryland Office of the Comptroller's new online tax portal. In an emailed statement, the Office of the Comptroller told CBS News that their online tax processing system was down between January 30 and February 9 to help in the launch of Maryland Tax Connect -- a new online tax filing portal. 

The outlet spoke to Sunny, a Maryland taxpayer, who expressed frustration, saying, "I just moved into a new place and I wanted to get things for my kids, wanted to get caught up on bills, put food in the house." She's not alone, as others in her community report similar delays.

The Comptroller's office clarified that the system downtime for the portal launch impacted refund processing. Comptroller Brooke Lierman defended the initiative, emphasizing its role in modernizing tax services. With over 330,000 returns in the processing queue, the office is working diligently to clear the backlog. 

Lierman's office said anyone who filed before tax season officially opened on January 29 should receive their refunds this weekend or early next week.

3. Boston Faces Loss of $1.4 Billion In Tax Revenue

Credit: John Coletti/Getty Images

A new report from the Boston Policy Institute reveals that Boston faces a significant loss in tax revenue due to empty office spaces, estimating a $1.4 billion decrease over the next five years and a subsequent annual shortfall of $500 million. Evan Horowitz, from Tufts University's Center for State Policy Analysis, told news network WBUR, "The shift to remote work means fewer people are traveling to offices and there's no reason to expect that office work is going to come back, so this shortfall will continue."

With over a third of its revenue reliant on commercial property taxes— the highest proportion among major US cities—Boston faces unique vulnerability. Horowitz suggests potential solutions, including state aid or local tax adjustments, but warns against simply raising property taxes, fearing it could dissuade investors and burden residents.

As Boston strives to rejuvenate its downtown area by attracting businesses and visitors beyond the workday, addressing this revenue shortfall becomes increasingly critical. The report points out the urgent need for proactive measures to mitigate the financial impact of remote work on the city's economy.

4. India's Opposition Party's Bank Accounts Frozen After $25 Million Tax Demand

India's Congress party -- the main opposition to the current government -- raised alarm on Friday, February 16 as its bank accounts were frozen due to a $25.3 million income tax demand, sparking accusations of a threat to democracy ahead of national elections. Congress treasurer Ajay Maken lamented the financial repercussions, revealing, "We don't have money to pay electricity bills, to pay salaries to our employees."

According to Reuters, the dispute with the tax department traces back to 2018-2019, and while the income tax tribunal permitted partial account operation until February 21, concerns linger over the frozen funds, which include contributions from crowd-funding and membership drives. A source familiar with the issue clarified that the freeze followed delays in paying taxes, emphasizing routine procedures for recovery.

The timing of the tax department's action, just ahead of the election announcement, raised political tensions, with Congress president Mallikarjun Kharge condemning it as an affront to democracy and urging judicial intervention.

5. Chicago Bears Embroiled In Tax Valuation Dispute With Local School District

Credit: Mike Mulholland/Stringer/Getty Images

In the ongoing property tax valuation dispute over the former Arlington International Racecourse, the NFL's Chicago Bears and local schools face a $100 million gap in appraisals, complicating negotiations. The Chicago Tribune reports that the Bears presented appraisals ranging from $60 million to $71 million, categorizing the land as vacant residential, subject to a 10% tax rate. In contrast, local school districts valued the land at $160 million, taxed at 25% due to commercial classification.

The Bears -- one of the National Football League's most storied organizations -- have plans to construct a new stadium on the site, leaving behind the legendary Soldier Field where they've played since 1924. 

As the team looks to break ground in the near future, this appraisal discrepancy, combined with Cook County Assessor Fritz Kaegi's substantial increase in the land's appraised value, poses challenges. CBS News notes that the parties have until Saturday, February 17 to negotiate a lower valuation to resolve the issue.

Despite the daunting task, Chairwoman Samantha Steele emphasized the importance of fair treatment for all taxpayers, urging both sides to find common ground. With tensions high, board commissioner Larry Rogers, Jr. criticized the assessor's valuation, hinting at a potential vote in favor of the Bears.

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