On The Money: IRS faces 35 million unprocessed tax returns | Robinhood to pay record $70 million settlement

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THE BIG DEAL — IRS ended filing season with 35M unprocessed tax returns: The IRS ended this year’s filing season with more than 35 million individual and business tax returns that have not yet been processed, according to an independent watchdog report released Wednesday. 

• The report, conducted by the National Taxpayer Advocate’s office at the IRS, found that while most taxpayers were able to successfully file their returns and receive refunds, a record number of Americans did not. 
• The number of unprocessed tax returns is more than four times greater than the number recorded at the end of the 2019 pre-pandemic filing season. 
• This includes 16.8 million paper tax returns waiting to be processed, 15.8 million that were suspended during processing and require further review, and roughly 2.7 million amended returns that still need to be processed, according to the report. 

The Hill’s Celine Castronuovo has more here.

LEADING THE DAY

Robinhood to pay record $70 million settlement with regulator: A financial industry regulator Wednesday ordered Robinhood Financial to pay nearly $70 million in fines and restitution to customers harmed by regulatory lapses and inaccurate information.

Robinhood will pay $57 million in fines to the Financial Industry Regulatory Authority (FINRA), a self-regulatory agency for brokerage firms, and $12.6 million in damages to thousands of customers. It is the largest penalty ever levied by FINRA, the regulator said.

The allegations: 

• FINRA alleged that since 2016, Robinhood frequently provided customers with incorrect information about the net value of their investments, the amount of risk they had taken and whether they could be required to put up more cash for their current positions.
• FINRA also alleged that Robinhood allowed thousands of customers who did not meet the company’s requirements or should not have been approved for other reasons to trade options, which are generally riskier and more complicated than stocks.
• Robinhood additionally failed to adequately supervise the technology needed to process basic customer orders, FINRA alleged, leading to several outages that locked customers out of their accounts. 
• The company also allegedly failed to report tens of thousands of customer complaints to FINRA.

I break down the historic sanction here. 

Anticipation of possible Trump Organization indictments builds: Former President Trump’s inner circle and legal experts are bracing for the political and legal fallout of charges being filed against his company as soon as Thursday.

• Multiple news outlets reported New York prosecutors are expected to charge the Trump Organization, as well chief financial officer Allen Weisselberg, with tax-related crimes. 
• The charges stem from multi-year investigations by the Manhattan district attorney’s office as well as the New York attorney general’s office into the financial dealings of the Trump Organization.
• The Wall Street Journal reported the company and Weisselberg are expected to face charges related to allegations that Trump Organization employees avoided paying taxes on fringe benefits like cars, apartments and other bonuses they received through the company.

What it means for the former president: Trump is not expected to face charges personally, but there is still some concern within his circle about the consequences. Multiple sources said there has been chatter among aides in recent days about the looming announcement out of New York, though most do not believe it will impact Trump and his political operation at this point. The Hill’s Brett Samuels has more here.

GOOD TO KNOW

• Rep. Carolyn Maloney (D-N.Y.) is raising concerns with the Securities and Exchange Commission about a potential public offering by PicS Ltd, a company connected to Joseley and Wesley Batista. The Batistas own the company that controls meatpacker JBS SA and have paid more than $280 million in fines to the Justice Department and Securities and Exchange Commission (SEC) to settle charges it violated federal anti-corruption laws. Read her letter here.
• President Biden on Wednesday eliminated three Trump-era rules governing climate change, finance and employment discrimination claims, signing Congressional Review Act (CRA) resolutions passed by the House and Senate to get rid of the rules.
• The Securities and Exchange Commission (SEC) needs to draw on its regulatory authority and make companies disclose both their risks to climate change and impacts on it, California Attorney General Rob Bonta told The Hill’s Equilibrium.
• The bipartisan infrastructure deal President Biden announced last week would decrease government debt and increase gross domestic product (GDP) in the long run, according to an analysis released Wednesday by the Penn Wharton Budget Model (PWBM).

ODDS AND ENDS

• Amazon sent a request to the Federal Trade Commission (FTC) on Wednesday asking its new chair Lina Khan be recused from any antitrust investigations into the company because of her past critiques of the e-commerce giant.
• The Biden administration announced on Wednesday that it will raise pay for federal firefighters to at least $15 per hour as part of a broader strategy to respond to wildfires.