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Treasury cut withholding in 2018, resulting in many Americans facing surprise tax penalties this filing season

In  new letter, Senator Murray and Senate Democrats urge Trump Administration to waive fines for working taxpayers who underpaid by no fault of their own

Senators: “Because of the Administration’s 2018 withholding manipulation, we believe the American people are unfortunately in store for a surprise pocketbook reckoning that will require millions to pay higher taxes under the new law than what they were promised”

(Washington, D.C.)  – U.S. Senator Patty Murray (D-WA) joined 39 other Senate Democrats in a new letter to the Trump administration calling for the IRS to waive penalty fees associated with surprise tax bills many working Americans are facing due to actions taken by the Treasury in early 2018. Following the enactment of the new Trump tax law, the Treasury Department chose to under-withhold taxes from nearly 30 million taxpayers, according to a GAO estimate, millions more than are under-withheld in a typical year. With tax filing season now underway, there are mounting reports that many Americans who traditionally count on receiving tax refunds are learning they were under-withheld and owe the government money, potentially including penalties for underpayment. This financial shock for millions of taxpayers didn’t have to happen. The Treasury had a year to adjust withholding tables to reflect changes in the new tax law, but they rushed out the changes in January 2018, just weeks after the law passed.

“Because of the Administration’s 2018 withholding manipulation, we believe the American people are unfortunately in store for a surprise pocketbook reckoning that will require millions to pay higher taxes under the new law than what they were promised. The pain caused by the Administration’s tax bill was entirely avoidable. Democrats would have crafted a broad middle class tax cut, but we were cut out of the process. However, we would like to work with the Administration and IRS to spare working families the additional injury of tax penalties when they discover the claim of huge tax refunds was too good to be true,” the senators wrote.

Previously, Senator Murray strongly opposed President Trump and Republicans’ efforts to jam through their tax plan that has benefitted the wealthiest Americans and biggest corporations. The full letter to Treasury Secretary Mnuchin and IRS Commissioner Rettig can be found here.