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TaxBuzz Top 5 - IRS Refund Checks Getting Stolen in the Mail, NJ Bill Would Eliminate Tip Taxes & More

by
Rebekah Barton
on
10/4/2024
TaxBuzz Top 5 - IRS Refund Checks Getting Stolen in the Mail, NJ Bill Would Eliminate Tip Taxes & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Tax Refund Checks Stolen in the Mail Spark Calls for Action

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Credit: Natalia Bratslavsky/Getty Images

The Wall Street Journal reports that tax refund checks are being stolen from mailboxes across the U.S., leaving frustrated taxpayers without their refunds—and even replacement checks being reissued by the Treasury Department are also getting stolen. Rep. Nicole Malliotakis (R., N.Y.) reported 218 cases of stolen checks from her district alone, amounting to $3.8 million. One taxpayer even had to wait through four attempts to get their refund.

"People are getting these checks reissued and the reissued checks are stolen," Malliotakis stated, urging the IRS and Treasury to take immediate action.

The problem is widespread. Atlanta-based spine surgeon Bennett Grimm is still waiting on his $96,000 refund after two checks were stolen. "You can’t win," said Grimm, after his checks were fraudulently cashed.

According to the IRS, over 90% of taxpayers opt for direct deposit, but nearly 10 million paper refund checks were issued last year. Some taxpayers prefer paper checks to sharing bank details with the IRS, despite the increased risk of theft. IRS Commissioner Danny Werfel emphasized that direct deposit remains "the fastest and safest way" to receive refunds. A technology update that will allow taxpayers to switch to direct deposit after a check is lost or stolen is in development, but still a few years away.

2. Hurricane Helene Recovery Costs Mount as Taxpayer Burden Grows After Deadliest Storm Since Katrina

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Credit: narvikk/Getty Images

Hurricane Helene, now the deadliest U.S. storm since Katrina, has killed at least 213 people across six southeastern states, leaving taxpayers facing mounting recovery costs. The storm's aftermath includes widespread infrastructure damage, ongoing power outages, and blocked roads that have slowed rescue efforts and increased financial strain.

President Biden has approved requests from Georgia, Florida, and North Carolina for federal funds to cover state and local recovery efforts. However, questions loom over how the broader economic impact—estimated to be in the billions—will be financed. With federal and state tax dollars funneled into the recovery, local officials are left weighing the long-term financial consequences.

While emergency funds are in motion, residents and volunteers have turned to social media to raise additional funds and provide immediate relief to the hardest-hit communities, coordinating deliveries of food, water, and temporary housing. The aftermath of Helene is expected to test the region's financial resilience for years to come.

3. Brazil Rolls Out Minimum 15% Tax on Multinational Profits to Bolster Fiscal Goals

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Credit: Francisco Aragão/Getty Images

Brazil's government introduced an executive order late Thursday October 3 to establish a minimum 15% tax on multinational corporations' profits. This move aims to generate additional revenue as the country works toward balancing its budget without broad spending cuts. The order, published in the official gazette, imposes an extra levy on Brazil’s social contribution tax on corporate income (CSLL), ensuring taxation aligns with global standards.

The executive order reflects Brazil's commitment to the Global Anti-Base Erosion Rules (GloBE), spearheaded by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting. The country, as chair of the G20, is positioning itself to meet its fiscal targets, including a balanced budget by 2025.

While the government has yet to specify expected revenue from the new tax, officials will provide further details in a press conference on October 4.

Per Reuters, Brazil’s executive orders take immediate effect but must be ratified by lawmakers within four months or expire.

Related: Tech Giants Face Major EU Tax Penalties, Trump Pledges to Eliminate Taxes on Overtime Pay & More

4. NJ Senator Proposes Bill to Exempt Tips from State Income Tax

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Credit: Igor Vershinsky/Getty Images

State Senator Vince Polistina (R-2) has introduced a bill (S-3741) to exempt tips from New Jersey’s gross income tax, aiming to provide financial relief to service industry workers. Polistina argues that taxing tips is akin to "taking credit for someone else’s hard work," as these gratuities are earned through excellent customer service.

This issue of tip taxation has become a hot button topic during this year's Presidential campaign season; the elimination of taxes on tips has garnered particularly strong support in Nevada. 

“Workers deserve to keep their earnings without the government taking a cut,” said Polistina in an official press release. He believes the legislation will particularly benefit employees in the restaurant, hospitality, and personal care industries, such as bartenders, casino dealers, and hairdressers, who often rely on tips to supplement their base wages.

The senator emphasized that his proposal is a pro-worker initiative aimed at easing the financial burden on service industry employees, an issue also being debated in other states.

“This should be a bipartisan issue supported by all to provide direct relief to some of our hardest working citizens,” Polistina concluded.

5. Cupertino Keeps $56.5M in Sales Tax from Apple After Settlement with California

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Credit: Vera Tikhonova/Getty Images

Cupertino will no longer need to repay California millions in sales tax revenue collected from Apple, following a settlement with the California Department of Tax and Fee Administration (CDTFA). Mercury News reports that the update comes after the city had set aside $56.5 million in its budget to cover the repayment of funds received from the tech giant.

Last year, the CDTFA audited Cupertino and found that a long-standing sales tax agreement with Apple, which allowed the city to receive a portion of the company’s sales tax revenue, was improper. The $56.5 million covers disputed sales tax collected between April 2021 and June 2023.

Despite the audit findings, the recent settlement allows Cupertino to retain the disputed funds through August 2024, though the terms remain confidential. Mayor Sheila Mohan expressed relief, calling it “the best outcome for the residents of Cupertino.”

However, starting in 2025, Cupertino will no longer receive Apple’s sales tax, leaving the city to find new revenue streams or reduce expenditures to offset the shortfall.

Feature Image Credit: wsmahar/Getty Images

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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