Democrat urges IRS to quickly process Gold Star families’ refund requests

A Democratic lawmaker is urging the IRS to quickly process amended tax returns filed by the families of deceased military members after Congress enacted legislation last year to provide these families with tax relief.

“Gold Star Families are counting on prompt receipt of their refunds to help make ends meet in this time of economic uncertainty,” Rep. Elaine Luria (D-Va.) wrote in a letter late last week to IRS Commissioner Charles Rettig.

In December, Congress passed an omnibus spending package that reversed changes that the Republicans’ 2017 tax-cut law made to a tax on children’s unearned income, known as the kiddie tax. The legislation allowed taxpayers to apply the repeal retroactively.

The changes to the kiddie tax in the 2017 law were made in an effort to simplify it, but they had the unintended consequence of raising taxes on survivor benefits received by the children of deceased military members. Luria was one of the leaders in Congress on the effort to undo the kiddie tax changes. 

Luria wrote in her letter that many eligible families filed amended 2018 tax returns in January or February but that most of them have yet to receive their refunds.

“These delays would create hardships for taxpayers in the best of times, but they are especially damaging in this current economic crisis,” Luria wrote.

She said that some delays are understandable because of the coronavirus pandemic and that many IRS employees are doing the best that they can, but that the refunds are critical for Gold Star families.

Luria urged the IRS to “investigate this matter and take all actions necessary to ensure it can quickly process all outstanding refund requests, especially amended returns for 2018.”