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IRS refund frenzy: Democrats blast Trump Treasury for 'goosing' paychecks

Brittany De Lea

While some Americans are frustrated with the size of their refunds this tax season, a number of Democratic lawmakers are using the opportunity to criticize the Trump administration’s tax law.

A group of about 40 Democratic senators sent a letter to the administration on Friday, calling for the Internal Revenue Service (IRS) to waive penalties on taxpayers that had their payments underwithheld this year as a result of the tax reform law and the adjusted withholding tables.

“It looks like the Trump Treasury Department spent 2018, an election year, goosing people’s paychecks by under-withholding, and it should have been obvious that the bill would come due eventually,” Senate Finance Committee Ranking Member Ron Wyden, D-Ore., said in a statement.

Senate Minority Leader Chuck Schumer, D-N.Y., blasted the administration for the resulting refund amounts.

“Many Americans depend on their tax refund to pay bills and make ends meet – but this tax season, working families will see smaller than expected returns and surprise tax bills because the Trump administration used smoke and mirrors in a shallow attempt to exaggerate the impact of their tax law on middle class families for political reasons,” Schumer said.

As previously reported by FOX Business, it was projected that about 21 percent of workers were at risk of having their taxes underwithheld under the current tax structure – 3 million more than estimates based on the old tax code. Taxpayers were urged to check and update their withholding amounts during the year, but as of October, most people had not done so.

The IRS announced last month it would waive the penalty on those whose total withholding and estimated tax payments are at least 85 percent of the taxes they owe.

Meanwhile, taxpayers have been airing frustrations on social media with hashtags like #TaxScam and #NeverOwedBefore as smaller refund checks come in. Some people are even stuck with a bill for the first time.

The average refund during the first 12 days of filing season was $1,949, the IRS said on Thursday. That compares with $2,135 during the same period last year – a decline of 8.7 percent.

The administration, however, is fighting back to assure Americans that they received a financial benefit from the new tax law.

Overall, Treasury officials said they expect fewer Americans to get refunds this year when compared with last year. On Thursday, a spokesperson for the Treasury Department said smaller refunds were “positive news for taxpayers” because it meant they were paying the appropriate amount in taxes throughout the year.

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Individual taxes will be lower for approximately 80 percent of filers thanks to the Tax Cuts and Jobs Act. Meanwhile, another 15 percent of people will see no change, according to the administration. That leaves about 5 percent who will owe more.

Regardless of the tax cut, however, many people rely on their refund to pay off certain expenses, which could be a problem for those banking on bigger checks. This year, the average person expected is to receive about $3,000, according to a survey from GOBankingRates. More than one-in-four people said they were planning to use the cash to pay off debt.

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