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Chu, Lewis Request Tax Refund Update from Mnuchin and Rettig

February 12, 2019

Washington, DC — In the wake of reports that millions of taxpayers have been surprised to learn they owe money to the Internal Revenue Service (IRS) this filing season, Ways & Means Oversight Subcommittee Chairman John Lewis (D-GA) and Oversight Subcommittee member Judy Chu (D-CA) sent a letter to Department of Treasury (Treasury) Secretary Steven Mnuchin and IRS Commissioner Charles Rettig, requesting additional relief for taxpayers who unintentionally underwithheld their income taxes in 2018. Reps. Lewis and Chu requested that the threshold for relief from the IRS underpayment penalty be lowered to include taxpayers who paid at least 80 percent of their 2018 tax liability.

In their letter, the members pointed out that IRS and Treasury prepared new federal tax withholding tables last year following the enactment of the Republican tax law, the "Tax Cuts and Jobs Act" (TCJA). "As you know, when Treasury and the IRS released these tax withholding tables in 2018, the tables did not fully factor in the TCJA's reduction in itemized deductions and the TCJA's removal of personal exemptions," Reps. Lewis and Chu wrote. "As a result, taxpayers likely had less tax withheld in 2018 than in the prior year."

The members also cited a July 2018 U.S. General Accounting Office (GAO) report that estimated "that 21 percent of taxpayers (nearly 30 million Americans) will owe more taxes in 2019 due to underwithholding," as a result of the newly-adjusted withholding tables. In addition to asking for relief for a greater number of taxpayers who unintentionally underwithheld last year, Reps. Lewis and Chu also requested "to know what adjustments Treasury and the IRS made to incorporate the TCJA into the withholding calculations for 2019 and what additional guidance Treasury and the IRS plan to issue to address under payments and lower than expected refunds."

"We do not want taxpayers to be in the same situation again next year," the members emphasized.

Full text of the letter is available here.