In a rare Oval Office speech, President Trump said he had instructed the U.S. Department of the Treasury to allow deferred tax payments by affected individuals and businesses without penalties or interest. The president also called on Congress to act immediately to provide an unspecified amount of payroll tax relief to the American public, a plan Democratic House leaders said Tuesday was off the table.
Treasury Secretary Steven Mnuchin was on Capitol Hill earlier in the day and won support from key lawmakers on a tax filing deadline extension as the stock market plunged again and the World Health Organization declared COVID-19 a pandemic. Mnuchin said the treasury could pump $200 billion worth of stimulus into the U.S. economy by allowing individuals to delay paying their personal income taxes without facing penalties or interest.
"We can do [it] on an administrative basis. We don't need Congress," Mnuchin said at a hearing of the House Appropriations Subcommittee on State, Foreign Operations and Related Programs. "We are looking at providing substantial relief to certain taxpayers and small businesses who will be able to get extensions on their taxes."
Trump's and Mnuchin's remarks came a day after Democrats on the House Ways and Means Committee requested that Internal Revenue Service Commissioner Charles Rettig evaluate and provide an update on the agency's ability to provide assistance to taxpayers and process their returns during a filing season affected by the coronavirus.
In a letter signed by House Ways and Means Committee Chairman Richard Neal, D-Mass., and all other Democrats on the tax panel, the lawmakers asked Rettig to consider the need to provide taxpayers relief from certain filing and payment penalties during the outbreak. They also expressed concern about "the ability of taxpayers, free tax preparation sites and tax professionals to meet the filing deadline."
Nine congressional Democrats from Washington state also wrote to the IRS on Wednesday, requesting a filing-penalty delay of up to six months for communities affected by the coronavirus.
"We request that, regardless of whether filers asked for an extension of time to file on or before April 15, the IRS not impose any addition to tax for late filing or payment on these taxpayers provided they file their tax returns and pay any tax due by the extended deadline," said the letter from Rep. Suzan DelBene, D-Wash., and eight other lawmakers.
Rep. Kevin Brady, R-Texas, the Ways and Means ranking member, told reporters that a tax-return filing delay could help small and medium-size businesses as they monitor their cash flow and determine the impact of the virus. Brady said he had talked to Trump and was working with the administration to meet the economic and health challenges facing Americans.
A tax-filing delay also won approval from Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Sen. Ron Wyden, D-Ore., the committee's ranking member. Grassley said he didn't expect any pitfalls from delaying the filing season 90 days to six months. He added that a delay would be beneficial to laid-off workers and would allow the money "to circulate through the economy to a greater extent."
Wyden said he had not fully considered the idea, but said that it "makes sense." His litmus test for supporting tax relief is whether it reflects the modern American economy, Wyden said.
"I am just am not going to support some array of new bailouts for multinational corporations," Wyden said.
--Editing by Neil Cohen and Peter Rozovsky.
Update: This story has been updated to include information from the president's speech.
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