Editor’s note: This letter is by Steve Cairns, owner of Advisor Tax Services. He lives in Stowe.
Regarding Stuart Varney’s commentary on the Advance Child tax Credit, you do not know the half of the problems that this program will cause.
Mr. Varney is correct to flag this program as another entitlement that he feels will never be repealed. However, it will do a lot of damage in the meantime.
This is the first time that the U.S. government will send cash to taxpayers without their consent that they may have to give back when it comes to tax filing time. All previous “refundable” credit programs — such as EITC, Additional Child Tax Credit (not to be confused with Advance Child Tax Credit), the ACA PTC, the Recovery Rebate Credit — have to applied for and have never had to be returned to IRS.
This is the first time that these type of entitlement payments are going to couples with up to $440,000 of income. It is true that couples in this range have been eligible to receive a child tax credit for the last three tax years, but it was treated as a “payment” on the tax return and was never subject to any give-back rule (except for the ACA subsidies prior to 2021).
The opt-out process is complex and too late. The IRS only brought online the opt-out tool a few weeks ago, and it is understandably difficult to use since you have to create a secure account on IRS.gov before you can do anything.
This in itself is dangerous to taxpayers because access to these new accounts can easily be gained by the criminals.
I can go on. We have reached a dangerous inflection point in the administration of the U.S. tax code. The transition of the old IRS to the new IRS has made a giant leap. Unfortunately, there will be more of these shenanigans to come.