Question

Answer the following question:

1) Explain one provision or change to the tax law included in any of the coronavirus stimulus bills that relate to tax or the Internal Revenue Service (IRS). The only thing you can notwrite about is the stimulus payments being paid to everyone by the IRS. List your source in the answer.

Answer 1

The provision, inserted into the legislation by Senate Republicans, temporarily suspends a limitation on how much owners of businesses formed as “pass-through” entities can deduct against their nonbusiness income, such as capital gains, to reduce their tax liability. The limitation was created as part of the 2017 Republican tax law to offset other tax cuts to firms in that legislation.

Suspending the limitation will cost taxpayers about $90 billion in 2020 alone, part of a set of tax changes that will add close to $170 billion to the national deficit over the next 10 years, according to the Joint Committee on Taxation (JCT), the nonpartisan congressional body.

The Senate on Wednesday unanimously approved a roughly $2.2 trillion stimulus package to address the economic impact of the coronavirus, pushing through one of the largest pieces of legislation in the modern history of Congress as the nation braces for the deepening impact of the outbreak.

The bill is aimed primarily at addressing the economic calamity that’s unfolding because of shutdowns intended to slow the spread of the outbreak, with analysts making dire predictions about soaring unemployment claims and economic contraction.

The legislation takes a multipronged approach to confronting the mounting crisis. It contains a number of measures aimed directly at helping workers, including stimulus checks for millions of Americans, and others to shore up the government safety net, with provisions such as more food stamp spending and more robust unemployment insurance benefits.