On The Money — How the IRS may change how we file taxes

The IRS has some big goals to tackle, thanks to President Biden’s new economic package — and they may make Tax Day less of a nightmare. We’ll also look at a warning on student loan forgiveness and the Republican fight against environmental investing rules.

But first, say goodbye to Anthony Fauci.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

IRS could be on verge of changing tax filing process

The IRS could be on the cusp of revolutionizing the way that Americans file their taxes.

The Inflation Reduction Act signed into law by President Biden on Tuesday provided $80 billion in funding for the agency, including $15 million to deliver a report on a free, government-run tax e-filing system that tax simplification advocates have long argued for.

But the agency is on a tight deadline to deliver.

• While most of the $80 billion for the IRS in the new legislative package goes out over the next decade, the agency has only about a year to turn in its e-filing report.   
  

• Specifically, the agency has to figure out how much an online filing system would cost, the design of the system and how taxpayers would feel about using one. 
  

• Tax experts say the system could take two basic forms: one more conservative in scope and one more far-reaching.

The Hill’s Tobias Burns explains here.

LEADING THE DAY

Summers warns against extending student loan payment pause

Former Treasury Secretary Larry Summers on Monday cautioned the Biden administration against extending the moratorium on federal student loan repayments and knocked “unreasonably generous student loan relief” he said could worsen inflation.

“I hope the administration does not contribute to inflation macro-economically by offering unreasonably generous student loan relief or micro-economically by encouraging college tuition increases,” Summers, who served during the Clinton administration, tweeted on Monday.

• The Biden administration is expected to make a decision soon on whether to extend the freeze on repayment and interest accrual for student borrowers set to lapse at the end of the month. The pause was implemented under the Trump administration at the onset of the coronavirus pandemic and has since been extended six times. 
  

• Advocates and Democrats have pressed for continued relief for borrowers, citing ongoing financial hardship due to the coronavirus pandemic and rising inflation that has forced many Americans to spend more on basic necessities.  
  

• However, the continued moratorium has been met with considerable pushback from Republicans who say the relief is too costly and is unfair to Americans who didn’t attend college.

Aris breaks it down here.

GOP FIGHTS ESG

Republicans wage war on environmental investing rules

A groundswell of Republicans in states across the U.S. are waging a war against environmental, social and governance (ESG) investing, framing the fight against the economic strategy as a stance against what they call liberal policies interfering in the free market.

Prominent GOP figures including former Vice President Mike Pence and Florida
Gov. Ron DeSantis, both potential 2024 contenders, have latched onto the issue.

But so have state-level Republicans, who are implementing restrictions that blacklist certain firms from doing business with their state, usually because of what they perceive as unfavorable stances toward an industry that is the main driver of the global crisis of climate change: fossil fuel.

“I am leading the charge on this, but there is an army behind me,” West Virginia State Treasurer Riley Moore said in an interview with The Hill.

The Hill’s Stephen Neukam breaks it down here.

ELON SHORT STORY

Musk presses for dismissal of Twitter suit, subpoenas Dorsey

Elon Musk is calling for the dismissal of a Twitter shareholder lawsuit over his terminating his multibillion-dollar buyout deal — and subpoenaing the social media company’s former CEO as he fights a lawsuit from Twitter itself seeking to make him complete the takeover.

The moves follow Musk’s unexpected announcement in July that he’d walk away just a few months after making the $44 billion agreement in April, as well as reports that the company lost revenue after Musk pulled back.

• The Tesla and SpaceX CEO terminated the buyout deal due to what he alleged were “false and misleading representations” from Twitter during the agreement processes and the company’s failure to provide information on “the prevalence of fake or spam accounts on Twitter’s platform,” according to a Securities and Exchange Commission filing. 
  

• Twitter filed a lawsuit to force Musk to go through with the acquisition, and Musk countersued.

Here’s more from The Hill’s Julia Mueller.

Good to Know

Education Secretary Miguel Cardona said the Biden administration will announce a decision on whether to extend a pause on federal student loan debt in coming days, butting up against the current deadline of Aug. 31, when the current moratorium on loan payments expires.

Cardona told moderator Chuck Todd on NBC’s “Meet the Press” that the announcement was forthcoming but declined to share any other details.

Here’s what else we have our eye on:

• New York Gov. Kathy Hochul (D) announced Monday that students and teachers will no longer be required to isolate or quarantine after being exposed to COVID-19.

• Pfizer said Monday that it has submitted its application to the Food and Drug Administration (FDA) for an updated COVID-19 vaccine targeting the omicron subvariant currently circulating.
  

• AP: “About 3,000 white-collar workers at Ford Motor Co. will lose their jobs as the company cuts costs to help make the long transition from internal combustion vehicles to those powered by batteries.”

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

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