Taxpayers & the sequester: What’s next?

If there’s any good news for taxpayers regarding across-the-board federal budget cuts that began to take effect March 1, it’s that the Internal Revenue Service (IRS) does not expect the so-called “sequester” to delay tax refunds this spring.

However, folks seeking help by visiting taxpayer assistance centers or calling the IRS’ help lines could face delays. If the sequester lasts into the summer, IRS employees could be “furloughed” (forced to take unpaid time off) for five to seven days, and the agency will continue a hiring freeze – all of which bodes ill effects for taxpayer services.

Plus, the agency will be reducing spending on other supports such as review of tax returns, at the very time when many federal policymakers demand greater efforts at ensuring tax compliance.

As we’ve reported earlier, tens of thousands of households could lose Volunteer Income Tax Assistance (VITA) help, if the sequester axe hits the program’s federal grant, which seems more a case of “when” than “if.” The same holds true for Tax Counseling for the Elderly and Low-Income Taxpayer Clinics.

These are just a few examples of the many, many ways the deep, annual budget cuts could inflict various levels of pain on working families over the next nine years, starting with $85 billion in cuts divided between defense and non-defense priorities in 2013. Also at stake are a broad range of education, health care, and human services.

At this early stage of the process, day-to-day specifics of the sequester will become clearer only during the course of the coming weeks and months. One thing is certain: It won’t be pretty.

The cuts will total $1.2 trillion by 2021, on top of the more than $1.5 trillion cuts that already have been designated to help reduce the federal deficit. Among other things, experts expect the sequester to throw up to 1 million Americans out of work and reverse progress toward our nation’s economic recovery.

Deficit reduction is important, but shouldn’t be pursued in ways that tank our economy and working families’ well-being. Our efforts should be balanced to avoid plunging our families and our nation into destitution.

That, in turn, requires the commitment of new revenues that are not taken from low- and moderate-income families. And it requires a far smarter and more targeted approach to any further federal spending cuts.

We remain hopeful that Congress will come-around once more and more Americans speak-up about the awful impact these cuts will have on the well-being of their families, their communities, and our entire economy. Watch NCTC’s website for more information on how you can add your voice in the weeks to come, and ensure you’re signed-up for advocacy communications to help you do so!

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About National Community Tax Coalition

National Community Tax Coalition (NCTC) is the nation's largest, most comprehensive membership organization for community-based organizations offering free tax and financial services to low-income working families.

Posted on March 4, 2013, in NCTC and tagged , , . Bookmark the permalink. 1 Comment.

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