FRANKLIN, Va. – In case you missed it, U.S. Sen. Mark R. Warner (D-VA) and Virginia House of Delegates Speaker Don Scott on Tuesday traveled to Franklin’s Hayden Village Center to sit down with Franklin community members and leaders who rely on Southampton Medical Center – one of the six rural hospitals in Virginia and more than 300 rural hospitals across the nation that are now at disproportionate risk of closure, conversion, or dramatic service reductions following passage of the “Big Beautiful” Republican budget law.

Key Quotes from Sen. Warner: View Clip HERE

• “I’ve been governor and senator for a long time. I think this may be the worst piece of legislation I’ve ever seen in my life, and that’s saying something.”

• “At the end of the day, this bill was about providing a giant tax cut disproportionately for the most successful Americans. And I’m all for success. I’m a businessman. I’m a capitalist. But the cost of paying for that extraordinary tax cut, we are taking in many ways the heart out of health care for Americans who are the most vulnerable.”

• “This was not a bipartisan bill. This was one team driving through a piece of legislation that will have huge, huge ramifications. The Big Ugly Bill will cut a trillion dollars out of Medicaid.” 

• “300,000 Virginians will lose their health insurance. Those people are not going to disappear. They’re going to simply show up at the emergency room. And if the hospital closes here, they’re going to have to spend a lot of time checking the traffic to see how to get to Portsmouth or Petersburg to get basic access to health care.” 

• “The mayor was talking a little bit about some of the challenges Franklin’s got now. If we’re going to recruit additional businesses here, keep our businesses that we’ve got, we’ve got to have local health care. That is the starting point.”

Key Quotes from Speaker Don Scott: View Clip HERE

• “Take the politics out of it and just deal with the math. You can’t deliver the same amount of services for substantially less resources. It’s impossible. This is math. You can’t argue with math. You can argue with a whole lot of stuff, but math is math. You can’t do the same thing that you used to do for one more dollar when you only have a dime.” 

• “What the Senator was talking about when he talked about the [enhanced Premium Tax Credit] subsidy, these are people who are working every day. These are people who are working hard, playing by the rules, families with children and they need the subsidy to be able to make up for the difference, that delta that happens between what they can afford and what they need. And that subsidy is paid for by people who have benefited from America in a real way, very wealthy people who have been able to benefit from our system. Why shouldn’t they give a little bit more back? As the Senator said, I’m a capitalist, too. I’m a trial lawyer. I love to get paid, love to make money, don’t get it twisted. But I’m also very grateful to be in a country where we have a system where somebody like me who should never be where I’m supposed to be … Only in America am I even possible. So I’m grateful to pay my fair share back. We have people who are billionaires who don’t want to pay their fair share back.”

Key Quotes from Mona Murphy, lifelong resident of Franklin, Va.: View Clip HERE

• “The potential closure of Franklin’s hospital … would have devastating consequences for our community. The closure of our hospital would leave [families] without accessible health care, forcing them to travel 20 miles to Suffolk, Virginia for medical services. For many, this distance is overwhelming due to financial constraints or lack of transportation options.”

• “Franklin is striving to rebuild itself through educational advancements, attempts at attracting new businesses and encouraging young families to settle here. However, the loss of the hospital would severely hinder these efforts … As someone who works closely with families and children in our schools, I see the dire need for accessible health care in our city every day. Emergencies are unpredictable and the absence of a nearby hospital could have life-threatening consequences for our students and residents. I can’t even imagine a scenario where a child’s life hangs in the balance because we lack immediate access to medical care.”

Event Coverage

• 13NewsNow: Southampton Medical Center at risk of closure after Medicaid cuts hit rural hospitals

• Cville Right Now: Sen. Warner meets with people who receive care at a rural hospital that could face closure

• Virginia Mercury: Federal, state lawmakers call on Va. hospitals to ‘be transparent’ about federal funding changes

###

WASHINGTON – Today, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) issued the following statement after a new Joint Economic Committee (JEC) report found that an estimated 302,608 Virginians would lose their health insurance under President Trump and Republicans’ tax plan:

“This new report estimates that the Trump tax plan would cause over 302,000 Virginians, including low-income children and people with disabilities, to lose their health insurance—all to pay for tax cuts for billionaires. That’s over 302,000 Virginians who will be forced to forgo a trip to the doctor’s office or get the critical medication they need. These cuts will have long-term, negative consequences for the health and wellbeing of our communities and our already overburdened health care system. We are committed to doing everything we can to stop this bill that will do real harm to communities across Virginia and the country.”  

According to the JEC, an estimated 136,583 Virginians would lose coverage under the Affordable Care Act, and 166,025 Virginians would lose coverage under Medicaid. This JEC report is based off of the latest numbers available, including from the nonpartisan Congressional Budget Office’s recent analysis of the Republican tax bill.

Warner and Kaine have been sounding the alarm about the effects of the GOP plan on Virginia families if Republicans in Congress continue to insist on gutting vital programs in order to pay for tax breaks for the richest Americans. The senators have noted that the GOP bill would cut SNAP benefits for more than 204,000 people in Virginia, raise energy costs for Virginia households, and jeopardize more than 20,000 Virginia jobs. The bill would also explode the deficit, eliminate a program allowing Americans to file federal taxes for free, raise taxes on minimum-wage workers while giving the richest 0.1% a $188,000 tax cut, and eliminate gun safety measures.

###

WASHINGTON – Just a week after Moody’s downgraded the U.S. credit rating due to mounting government debt, pushing up mortgage interest rates, Republicans in the House moved forward with their plan to provide massive tax breaks to the wealthiest Americans that would add an additional $3.8 trillion to the deficit, according to the nonpartisan Congressional Budget Office. U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) issued the following statement:

“Moody’s decision to downgrade our nation’s credit rating should have been a wake-up call, but instead, Republicans in the House doubled down with a tax plan that blows a hole in the deficit and leaves working families holding the bag. The result will be a ballooning national debt, higher interest rates, and the very real prospect of increased prices for everything from groceries to mortgages. Virginia families are already feeling the pinch from inflation and rising costs. The last thing they need is a reckless giveaway to the richest Americans that undermines our economic stability and puts the full faith and credit of the United States at risk. In the Senate, we will oppose this disastrous legislation.”

Additionally, the GOP tax bill would add so much to the national debt that it could trigger nearly $500 billion in cuts to Medicare beginning next year, according to the CBO analysis.

The nonpartisan CBO report also confirmed what Warner and Kaine have previously warned – that working Americans will foot the bill for massive tax breaks handed to the wealthiest few, if President Trump and congressional Republicans move forward. The CBO found that under the GOP plan, the bottom 10 percent of Americans would see household resources reduced by 4 percent while the top 10 percent would see their resources increase by 2 percent. Meanwhile, the Republican bill would result in $698 billion in cuts to Medicaid and $267 billion in cuts to nutrition assistance. 

Warner and Kaine have been sounding the alarm about the effects of the GOP plan on Virginia families if Republicans in Congress continue to insist on gutting vital programs in order to pay for tax breaks for the richest Americans, noting that the GOP bill would strip health insurance from more than 262,000 Virginians, cut SNAP benefits for more than 204,000 people in Virginia, raise energy costs for Virginia households, jeopardize more than 20,000 Virginia jobs, and raise taxes on minimum wage workers while giving the richest 0.1% a $188,000 tax cut.

###

WASHINGTON – Today, U.S. Sens. Mark R. Warner and Tim Kaine (D-VA) issued the following statement after Republicans in the House of Representatives voted in the dead of night to approve legislation to cut taxes for the ultra-wealthy while slashing Medicaid and nutrition assistance, raising taxes on working families, and exploding the national debt:  

“This bill would do real harm to Virginia families, workers, and communities. It would raise taxes on working families and rip health care away from more than 262,000 people in Virginia in order to give tax breaks to Donald Trump and his billionaire friends. Virginians deserve better, and we will oppose this bill with everything we’ve got as it comes to the Senate. “

Warner and Kaine have been sounding the alarm about the effects of the GOP plan on Virginia if Republicans in Congress continue to insist on gutting vital programs in order to pay for tax breaks for the richest Americans, noting that the GOP bill would strip health insurance from more than 262,000 Virginians; rip nutrition assistance away from at least 204,000 Virginians, including children; raise energy costs for Virginia households; jeopardize more than 20,000 Virginia jobs; and raise taxes on minimum wage workers while giving the richest 0.1% a $188,000 tax cut.

###

WASHINGTON – Today, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) joined 43 of their Senate colleagues in introducing the Tax Cut for Workers Act and the American Family Act, legislation that would cut taxes for workers and families by expanding the Earned Income Tax Credit (EITC) and permanently expanding the Child Tax Credit (CTC), respectively.

“As the Trump administration continues to sow chaos with policies that help his billionaire friends and hurt everyday Americans, I’m proud to introduce legislation that will cut taxes for the middle class and working families,” said Sen. Warner. “By increasing the Earned Income Tax Credit and permanently expanding the Child Tax Credit, we can provide financial relief to hard-working Americans and their families, ensure that parents have resources to help their children thrive, and encourage economic growth.”

“Hard-working American workers and their families deserve a tax break. That’s why I’m glad to help introduce these bills to nearly triple the Earned Income Tax Credit for workers who do not have children and permanently expand the Child Tax Credit for those who do,” said Sen. Kaine. “At a time when the Trump Administration’s policies are centered around tax cuts for billionaires paid for by senseless tariffs and cuts to social services, this legislation is even more important. I urge my colleagues on both sides of the aisle to join us in focusing on cutting taxes for the middle-class.”

Specifically, the Tax Cut for Workers Act would nearly triple the maximum EITC for childless workers, and extended eligibility to workers over age 65 and qualifying workers under age 25.

The CTC is one the most effective tools to reduce poverty and put money back in the pockets of working families. The American Family Act would increase the value of the CTC from the current level of $2,000 per child to $6,360 for newborns, $4,320 for children ages one through six, and $3,600 for children age six through 17. It would also end the longstanding, discriminatory policy that reduces the value of the CTC for low-income families, ensuring that the families of 17 million low-income children left out of the CTC under current law will receive the same credit as families in the middle class. In addition, the legislation would provide for monthly delivery of the credit so families have access to the credit as bills arrive and index the CTC for inflation to preserve the value of the credit moving forward.

Sens. Warner and Kaine have long supported policies that would help working-class families. Both senators provided key votes for the passage of the American Rescue Plan Act in 2021, which dramatically reduced child poverty through an expansion of the Child Tax Credit. The senators both helped pass the landmark Inflation Reduction Act in 2022, which helped families in Virginia and across the nation through expanded subsidies for health insurance, clean energy tax credits for homes and automobiles, and investment in job creation. This month, Sens. Warner and Kaine successfully passed bipartisan legislation in the Senate to roll back President Donald Trump’s tariffs on Canadian goods.

Full text of the bills are available here and here. 

###

WASHINGTON – Ahead of tax season, U.S. Sen. Mark R. Warner (D-VA) is pressing for answers from Erin Collins, the National Taxpayer Advocate at the Internal Revenue Service (IRS) regarding the underperforming Richmond TAS office, which serves the entire Commonwealth of Virginia and has been underperforming for years due to staffing shortfalls that have significantly increased caseloads and further strained the office’s ability to provide timely, effective service.

Taxpayer Advocate Service (TAS) offices like the one in Richmond are tasked with helping individuals with tax problems they cannot resolve on their own. They are also tasked with helping ensure that taxpayers are treated fairly and understand their rights. This letter comes amid the Trump administration’s ongoing attempts to gut the IRS and the services it provides to families.

“In light of the current degradation of the IRS workforce, it is imperative that TAS prioritizes improvements in taxpayer service – especially in offices where staffing issues already are causing delays and disruptions to citizens seeking assistance or simply relying on a timely tax refund,” wrote Sen. Warner. “I urge you to take immediate steps to enhance the service that Richmond TAS provides my constituents.”

“While pre-existing personnel and leadership issues at Richmond TAS have left morale among its staff low, the workplace atmosphere there likely will deteriorate further in the coming months as Trump Administration policies cause more staff to leave,” he continued. “Already quite strained with just 17 case advocates, another two advocates and a senior case advocate have accepted the Musk-Trump buyout, which will take effect on May 15. At that point, only 15 case advocates will remain to serve all of Virginia—a nearly 25 percent reduction in staff.”

In the letter, the Senator urged Advocate Collins to push back against any harmful personnel decisions that stand to negatively impact taxpayers and pressed for answers to the following questions regarding the performance of the Richmond TAS office:

1.      How long has Richmond TAS been performing in the bottom 50 percent of TAS offices nationwide?

2.      What metrics does TAS use to track performance of its local offices? What specific factors have contributed to Richmond TAS’s poor performance?

3.      What steps, if any, did TAS headquarters take to improve performance at Richmond TAS prior to January 2025?

4.      What support does TAS headquarters plan to offer Richmond TAS’s leadership to improve performance?

5.      How does TAS headquarters plan to address staffing shortages at Richmond TAS to ensure that Virginians receive the level of taxpayer service that they deserve?

A copy of letter is available here and text is below.

Dear Advocate Collins, 

I am writing to express my longstanding concerns regarding the quality of assistance that the Richmond Taxpayer Advocate Service (“TAS”) office is providing to Virginians. In light of the current degradation of the IRS workforce, it is imperative that TAS prioritizes improvements in taxpayer service – especially in offices where staffing issues already are causing delays and disruptions to citizens seeking assistance or simply relying on a timely tax refund. I urge you to take immediate steps to enhance the service that Richmond TAS provides my constituents.

The Richmond TAS office has struggled with underperformance for years, predating the current administration. The reasons for the office’s underwhelming service are two-fold.

First, Richmond TAS is not fully staffed. The office should have at least 19 case advocates, but currently has 17. Each advocate handles about 150 cases per year, meaning this staffing shortfall significantly increases individual caseloads and further strains the office’s ability to provide timely, effective service.

Second, I am concerned that TAS leadership has not done enough to foster a positive work environment and to improve morale at Richmond TAS. During challenging times, employees look to their supervisors for encouragement, reassurance, and direction. Regional and national TAS leaders must provide the support that those in offices like Richmond TAS need in order to operate effectively.

With the knowledge of Richmond TAS’s personnel issues and leadership challenges in mind, I ask you to answer the following questions by March 25:

1.      How long has Richmond TAS been performing in the bottom 50 percent of TAS offices nationwide?

2.      What metrics does TAS use to track performance of its local offices? What specific factors have contributed to Richmond TAS’s poor performance?

3.      What steps, if any, did TAS headquarters take to improve performance at Richmond TAS prior to January 2025?

4.      What support does TAS headquarters plan to offer Richmond TAS’s leadership to improve performance?

5.      How does TAS headquarters plan to address staffing shortages at Richmond TAS to ensure that Virginians receive the level of taxpayer service that they deserve?

While pre-existing personnel and leadership issues at Richmond TAS have left morale among its staff low, the workplace atmosphere there likely will deteriorate further in the coming months as Trump Administration policies cause more staff to leave. Already quite strained with just 17 case advocates, another two advocates and a senior case advocate have accepted the Musk-Trump buyout, which will take effect on May 15. At that point, only 15 case advocates will remain to serve all of Virginia—a nearly 25 percent reduction in staff.

Further, according to recent news reports, President Trump plans to cut IRS staffing by a total of 50 percent. If these cuts are applied across the board, Richmond TAS will be left with a skeleton crew of case advocates, further jeopardizing essential taxpayer services. I strongly oppose any staffing reductions that undermine TAS’s ability to serve Virginians, and I urge you to push back against harmful personnel decisions that will negatively impact taxpayers.

Thank you for the work that you do to advocate for Virginia’s taxpayers. I look forward to your response and to working together to improve the service that TAS provides to my constituents.

Sincerely,

###

WASHINGTON – U.S. Sens. Mark R. Warner (D-VA) and Jerry Moran (R-KS) led 10 of their colleagues in introducing legislation to amend the Internal Revenue Code to make certain that federal broadband deployment funding will not be considered taxable income.

Grants awarded to broadband providers for the purposes of broadband deployment are currently factored into a company’s income and taxed as income. This bipartisan legislation moves to exclude broadband deployment grants awarded through certain federal programs from an organization’s income, ensuring the entirety of federal dollars awarded to companies for the purpose of deploying broadband around the country can be used for that purpose, rather than making their way back to the government through taxes.

The senators were joined by Sens. Dan Sullivan (R-AK), Tim Kaine (D-VA), Tommy Tuberville (R-AL), Mark Kelly (D-AZ), Shelley Moore Capito (R-WV), Angus King (I-ME), Roger Wicker (R-MS), Raphael Warnock (D-GA), Kevin Cramer (R-ND) and Deb Fischer (R-NE) in introducing this legislation.    

“In order to fully reap the benefits of the Infrastructure Investment and Jobs Act and the American Rescue Plan, every dollar that was set aside to fund broadband expansion and deployment should be used for that purpose,” said Sen. Warner. “Taxing these broadband investments awards is counter-productive, and will ultimately diminish efforts to give more Americans access to high-speed internet.”

“Reliable, high-speed internet is more crucial than ever for Kansans to run their businesses, access telehealth or pursue an education,” said Sen. Moran. “This commonsense legislation would make certain federal grants provided for broadband deployment are not counted as taxable income to maximize the impact and success of these resources.”

“Broadband investments that I worked hard at securing in the bipartisan infrastructure bill will continue to unlock limitless possibilities in terms of telehealth, education and small business opportunities, and importantly, allow Alaskans to connect with one another,” said Sen. Sullivan. “However, taxing these investments weakens our efforts. This legislation ensures that funds directed by Congress are spent on deploying broadband, furthering my goal of connecting every single Alaskan.”

“We made tremendous federal investments, including through the Bipartisan Infrastructure Law, to build broadband infrastructure and help ensure Virginians can access reliable, high-speed internet, which is critical for school, work, and other opportunities,” said Sen. Kaine. “This legislation would ensure every dollar is used for this purpose by preventing broadband deployment grants from being taxed.”

“Rural communities are the backbone of our nation, and we want to ensure that Americans living in these communities have access to high-speed internet,” said Sen. Tuberville. “Taxing broadband grants would undermine federal efforts to prioritize rural broadband expansion. I am proud to support this legislation so that those living in rural America have internet needed to run their businesses, access health care, and pursue educational opportunities.”

“Taxing federal broadband grants as gross income undermines the intent for broadband deployment programs,” said Sen. Capito. “The Broadband Grant Tax Treatment Act would help make sure this doesn’t happen so we can continue our efforts to close the digital divide in the areas that need broadband connectivity the most.”

“In today’s digital age, access to high-speed, affordable broadband is critical for Maine people to live, work and stay connected with one another,” said Sen. King. “Every single dollar that is invested in broadband deployment is vital, and shouldn’t be clawed back by the government at the cost of connecting an extra community street or neighborhood that needs it. I want to thank my colleagues for coming together to help close the digital divide in rural and urban communities in Maine and across the nation.”

“It certainly won’t surprise North Dakotans to know that reliable, high-speed broadband brings our country together in many respects,” said Sen. Cramer. “Much like our integrated highway system and anchored by our interstate highway system, it connects large, rural states like ours to essential services like telemedicine, educational opportunities, and it strengthens, probably more than anything, our small businesses with e-commerce opportunities. By making every dollar for broadband expansion count, this bill really does pave the way for a much more connected future.”

###

WASHINGTON – Today, U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Finance Committee, joined colleagues in warning the Trump administration and Internal Revenue Service (IRS) leadership that staffing reductions at the IRS resulting from Trump’s hiring freeze and potential layoffs would likely delay tax refunds, harm taxpayer service and undermine law enforcement efforts.

The senators urged the administration to end the IRS hiring freeze immediately, avoid further staffing cuts, and protect the Criminal Investigation division that plays a key role in combating drug and human trafficking, terrorism and sanctions evasion. 

Regarding the impact of the hiring freeze and layoffs on taxpayer refunds and service, the senators wrote: “Americans need the IRS to be fully staffed with employees who can answer their questions, process their returns, send refunds, and keep IRS systems online and functional. It is nearly inevitable that this hiring freeze, compounded by layoffs and further reductions in staff mandated as a result of Elon Musk’s unprecedented power grab, will delay refunds and degrade taxpayer service. Millions of Americans plan their budgets around timely refunds every filing season. These reckless decisions on the part of Elon Musk and the Trump administration will likely cause serious financial hardship for people across the country.”

Regarding the impact on law enforcement and national security they continued, “IRS Criminal Investigation is at the forefront of federal law enforcement efforts to investigate fentanyl trafficking by cartels, human trafficking, terrorism financing, and sanctions evasion. For example, CI was the lead investigative agency in the largest international fentanyl/opioid seizure in U.S. history. This operation took down a massive drug trafficking operation and seized 864 kg of drugs, including an astounding 64kg of fentanyl and fentanyl-laced opioids, enough to kill thousands of people. CI was also responsible for the dismantling of several large fentanyl trafficking networks operated by the Sinaloa cartel, including a collaboration with Chinese money laundering organizations. An indefinite hiring freeze at CI would endanger both public safety and national security by directly hampering multi-agency efforts to pursue and dismantle these highly dangerous criminal networks.”

The letter was also signed by Finance Committee Ranking Member Ron Wyden (D-OR), and U.S. Sens. Chuck Schumer (D-NY), Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA) Bernie Sanders, (I-VT), Tina Smith (D-MN), Ben Ray Luján (D-NM), and Peter Welch (D-VT).

###

WASHINGTON – Today, U.S. Sens. Mark Warner (D-VA) and Shelley Moore Capito (R-WV) introduced the Rural Historic Tax Credit Improvement Act. This bill aims to streamline processes, reduce cost-burdens to rural home owners and small developers, and provide affordable housing incentives.

“By expanding access to historic tax credits, we can preserve our nation’s rich heritage while also incentivizing the construction of more affordable housing. I’m proud to join Senator Capito in introducing this legislation to bring new life to abandoned buildings and grow the housing stock in in rural communities,” Senator Warner said.

“Being a rural state shouldn’t mean losing out on private investment incentives like tax credits to help us preserve our communities’ history and revitalize local economies,” Senator Capito said. “I have enjoyed working with the dedicated group of West Virginians who brought this issue to my attention and who provided important perspectives during the creation of this legislation. The Rural Historic Tax Credit Improvement Act will help level the playing field for communities in West Virginia by attracting investment for economic expansion and additional housing supply.”

Currently, many historic tax projects are not economically viable in small and rural areas, giving a disproportionate advantage of the credit to large urban developments. The costs associated with the credit as-is severely limits rural areas, and especially largely rural states like West Virginia, from being able to use the credit to rehabilitate and revitalize historic properties.

Through improvements to the credit included in the Rural Historic Tax Credit Improvement Act, rural Historic Tax Credit projects will be more financially feasible and will result in a higher number of these projects being completed in rural areas and states.

The Rural Historic Tax Credit Improvement Act:

• Makes historic tax credit projects in rural areas eligible for an increased credit from the current 20% to 30%.
• Includes an additional increase in the credit to 40% for affordable housing creation.
• Allows the credit be used in addition to the Low-Income Housing Tax Credit (LIHTC).
• Allows small rural projects to claim the credit in the first year of use.
• Allows transferability of the credit to a third-party.
• Eliminates basis adjustment to simplify credit transaction.

This bill is supported by the Preservation Alliance of West Virginia, The Historic Tax Credit Coalition, Main Street America, and The National Trust for Historic Preservation.

Click here for more on what others are saying about the bill.

Click here to view a one-pager on the bill.

Click here for full bill text.

# # #

WASHINGTON – U.S. Sens. Mark R. Warner (D-VA) and Dr. Bill Cassidy (R-LA) have introduced legislation to improve customer service at the Internal Revenue Service (IRS). Specifically, the Improving IRS Customer Service Act would expand information regarding refunds available to taxpayers online and require the IRS to inform taxpayers applying for installment agreements about available collection alternatives if they appear to have an economic hardship.

“The IRS has been the source of massive headaches for taxpayers for years,” Sen. Warner said. “I am glad to introduce legislation that will ease some of this frustration by increasing clear communication and making IRS resources more readily available.”

“It should be easy for taxpayers to get the information they need from the IRS. Not every interaction with them has to be miserable,” Dr. Cassidy said. “We can streamline the process and give Americans the transparency they expect.”

Specifically, the legislation would:

• Establish a dashboard to inform taxpayers of backlogs and wait times; 
• Expand electronic access to information and refunds;
• Expand callback technology and online accounts;
• Inform individuals facing economic hardship of collection alternatives.

Sen. Warner has been a tireless advocate for improving IRS customer service and accelerating return times. Sen. Warner strongly supported the Inflation Reduction Act — legislation that provides funding to modernize IRS systems and improve customer service when paying taxes. Investments from the IRA have ensured the IRS has the resources it needs to process tax returns quickly, get rebates to taxpayers faster, and address challenges Virginians have when filing taxes. With additional resources, IRS response rates this tax season have improved from answering two out of every 10 calls to answering nine out of every 10 calls.

“By introducing the Improving IRS Customer Service Act, Senator Warner and Senator Cassidy have earned the gratitude of every taxpayer who's ever had to contend with the IRS's notoriously inconsistent customer service,” said Pete Sepp, President, National Taxpayers Union. “The sensible reforms in this bill, which include a wait-time dashboard, better access to refund information, customer callback technologies, and fairer measurement of IRS service levels, will all make a big difference in solving some of the more frustrating problems that taxpayers have encountered for years. More complete information on tax collection alternatives for taxpayers facing financial hardships will likewise give hope for many struggling families. This legislation is exactly the kind of guidance Congress needs to provide the IRS for a successful transformation of our entire system of tax administration. National Taxpayers Union is proud to endorse this innovative legislation, and we urge every lawmaker to actively work toward its passage in the remaining days of this Congress.”

“The Virginia Society of CPAs is pleased to support this bipartisan legislation to aid with tax administration. Our members and their clients greatly appreciate the emphasis on streamlining the taxpayer and tax practitioner experience with the IRS,” said Virginia Society of CPAs President & CEO Stephanie Peters, CAE.

“The AICPA strongly supports the legislative proposals outlined in S. 5280, which provide taxpayers and their tax advisors with clear and detailed information from the IRS in an intuitive and interactive format. Additionally, S. 5280 strives to protect the most economically vulnerable taxpayers by doing away with installment agreement fees and offering collection alternatives to those facing economic hardships. Collectively, these proposals will strengthen the public’s confidence in the tax administration system, and we thank Senators Warner and Cassidy for their leadership on this bipartisan bill,” said Melanie Lauridsen, Vice President of Tax Policy & Advocacy for the American Institute of CPAs.

A copy of the bill text can be found here. 

###

WASHINGTON – U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) wrote to Internal Revenue Service (IRS) Commissioner Danny Werfel expressing concern regarding the current backlog of Employee Retention Credit (ERC) claims and persistent delays for Virginia taxpayers awaiting payment.  Both Senators regularly hear from constituents regarding their unprocessed claims and lack of transparency and communication from the IRS regarding the status of these claims.

“While we applaud the work IRS has done since June 20th to root out improper claims and identify valid claims, we continue to hear from an increasing number of Virginians frustrated by the lack of clarity on when their individual claims will be adjudicated,” the Senators wrote.

“As you know, businesses and other organizations need answers about their ERC claims to determine whether to undertake investments in operations, workforce, and capital projects. Unfortunately, many of our constituents are telling us they cannot make informed decisions because they have no knowledge as to when and if their claims will be processed. Many Virginia organizations with ERC claims have been waiting a year or more with no response whatsoever from the agency. Despite our best efforts to advocate on behalf of these constituents, engagement from our offices have similarly yielded little to no clarity on when claims will be processed. Simply put, this is unacceptable,” they continued.

The ERC was created in response to COVID-19 to incentivize employers to keep their employees on payroll and off unemployment during the height of the pandemic. Virginia small businesses kept those promises, but years later, due to IRS processing delays, many are still waiting to receive the tax credits they believe they are due.

The IRS asserts that in the wake of the pandemic the program was overwhelmed by improper and, at times, fraudulent claims. In order to address this, last fall, the IRS announced a moratorium on processing claims submitted after Sept. 14, 2023, however this moratorium offered no clear path forward to those who had submitted legitimate claims. On June 26^th, 2024 National Taxpayer Advocate Erin M. Collins reported that the backlog of ERC claims awaiting adjudication had grown to about 1.4 million.

The IRS has taken action in recent months to address the backlog. On June 20, 2024, the IRS announced the end of a detailed review of over 1 million ERC claims and confirmed that a significant portion were improperly filed. The Service stated it would begin to deny high-risk claims while “judiciously processing” claims found with low levels of risk. More recently, the Service announced that it was moving forward with processing ERC claims submitted before January 31, 2024, including processing a block of 50,000 low-risk claims for payment. While the Senators welcome this step forward, the lack of clarity and information from the IRS is still a major concern.

In their letter the Senators also specifically asked that the IRS address the following questions:

• The IRS’ June 20th announcement indicated that over 1 million ERC claims have been categorized into three designated categories: 10%-20% are “Highest-risk” 60%-70% are “Unacceptable risk,” and 10%-20% are “low risk”. On August 8th, IRS announced that 28,000 high-risk claims received disallowance letters, “thousands” of unacceptable-risk claims are under audit, and 50,000 low-risk claims are being processed and should receive payment soon. This still leaves hundreds of thousands of claims the IRS has yet to act on. What is the timeline for the remaining applicants? When will all pending claims have received an initial response, whether it be approval, denial, or request for further information?
• How will filers not part of either initial group be made aware that their claims will take longer?
• How were the 50,000 claims IRS has said will soon receive payment identified? Was any consideration given to the financial situation of the taxpayers in that block? Now that processing of valid claims is beginning to ramp up, will there be a pathway for taxpayers reporting with documented financial hardship to have their claims adjudicated more quickly?
• We have made numerous inquiries on behalf of Virginians and receive new requests frequently. How does the agency intend to partner with our offices to ensure that these inquiries are reviewed and addressed in a timely manner?

Sens. Warner and Kaine have consistently pushed for faster processing of outstanding ERC claims. In April of 2023, Sen. Warner directly raised this issue with Commissioner Werfel during a Senate Finance Committee Hearing, as well as in multiple direct calls to the commissioner. Sens. Warner and Kaine have also been tireless advocates for improving IRS customer service and accelerating return times. The Senators strongly supported the Inflation Reduction Act — legislation which provides funding to modernize IRS systems and improve customer service when paying taxes. This will help ensure the IRS has the resources it needs to process tax returns quickly, get rebates to taxpayers faster, and address challenges Virginians have when filing taxes. These investments have improved IRS response rates this tax season from answering two out of every 10 calls to answering nine out of every 10 calls.

Additionally, Sen. Warner has been pressing the IRS to address pandemic-related processing delays for several years. Sen. Warner first raised concerns over backlogs at the IRS in February 2021, as millions of Americans waited for delayed stimulus payments and processing of their tax returns. In January 2022, as the tax filing season opened, Sen. Warner again called on Treasury Secretary Janet Yellen and then-Commissioner Rettig to quickly address reports of unprocessed tax returns for the 2020 filing season. Later that month, Sens. Warner and Kaine called on the IRS to provide relief for taxpayers amidst the backlog – a request they again reiterated in a bipartisan and bicameral March letter.

A copy of the letter is available here and below:

Dear Commissioner Werfel,

We write to you today regarding Employee Retention Credit (ERC) claims awaiting adjudication with the Internal Revenue Service (IRS). Our offices regularly hear from small businesses, non-profits, colleges, and other taxpayers across Virginia who have faced negative financial impacts while awaiting updates regarding their claims. We appreciate the recent announcement that IRS is moving forward in processing some pending claims, although many of our constituents are still awaiting clarity on the timing of their individual claim.

In her midyear report to Congress dated June 26, 2024, National Taxpayer Advocate Erin M. Collins reported that the backlog of ERC claims awaiting adjudication had grown to about 1.4 million total claims. We understand that this backlog exists in large part due to the moratorium put into place on September 14, 2023, which halted the processing of new ERC claims and substantially slowed the processing of previously filed claims due to concern about claim validity.

On June 20, 2024, IRS announced the end of their detailed review of over 1 million ERC claims and confirmed that a significant portion were improperly filed. The Service stated it would begin to deny high-risk claims while “judiciously processing” claims found with low levels of risk, projecting that some payments would go out later this summer. On August 8, 2024, the IRS provided further details about the first groups to be processed, including 28,000 claims showing a high level of risk that have been denied, in addition to 50,000 low-risk claims that will start being processed in the coming weeks. The announcement further stated that another “large block” of low-risk claims would be processed in the fall.

While we applaud the work IRS has done since June 20^th to root out improper claims and identify valid claims, we continue to hear from an increasing number of Virginians frustrated by the lack of clarity on when their individual claims will be adjudicated.

As you know, businesses and other organizations need answers about their ERC claims to determine whether to undertake investments in operations, workforce, and capital projects. Unfortunately, many of our constituents are telling us they cannot make informed decisions because they have no knowledge as to when and if their claims will be processed. Many Virginia organizations with ERC claims have been waiting a year or more with no response whatsoever from the agency. Despite our best efforts to advocate on behalf of these constituents, engagement from our offices have similarly yielded little to no clarity on when claims will be processed. Simply put, this is unacceptable. 

With these concerns in mind, we respectfully ask that you address the following:

• The IRS’ June 20^th announcement indicated that over 1 million ERC claims have been categorized into three designated categories: 10%-20% are “Highest-risk” 60%-70% are “Unacceptable risk”, and 10%-20% are “low risk”. On August 8^th, IRS announced that 28,000 high-risk claims received disallowance letters, “thousands” of unacceptable-risk claims are under audit, and 50,000 low-risk claims are being processed and should receive payment soon. This still leaves hundreds of thousands of claims the IRS has yet to act on. What is the timeline for the remaining applicants? When will all pending claims have received an initial response, whether it be approval, denial, or request for further information?
• How will filers not part of either initial group be made aware that their claims will take longer?
• How were the 50,000 claims IRS has said will soon receive payment identified? Was any consideration given to the financial situation of the taxpayers in that block? Now that processing of valid claims is beginning to ramp up, will there be a pathway for taxpayers reporting with documented financial hardship to have their claims adjudicated more quickly?
• We have made numerous inquiries on behalf of Virginians and receive new requests frequently. How does the agency intend to partner with our offices to ensure that these inquiries are reviewed and addressed in a timely manner?

We appreciate the work that you and IRS staff are doing to carefully review the claims and determine whether they meet Congress’s eligibility requirements. Safeguarding taxpayer funds is an important function of the agency, and the ERC program is among the most complex ever administered. However, Virginia small businesses and nonprofits simply cannot afford to wait indefinitely. The longer these claims languish, the greater the chance our constituents have to lay off workers or slow operations, hurting Virginia’s economy. We look forward to working with you to find an appropriate balance between offering transparency to taxpayers while ensuring that each return receives an appropriate review and is adjudicated accordingly.

Sincerely,

###

 WASHINGTON – Today, U.S. Sens. Mark R. Warner (D-VA) and Thom Tillis (R-NC) introduced the Renewable Natural Gas Incentive Act, bipartisan legislation to provide a tax credit for heavy-duty vehicles that use renewable natural gas.

“I am proud to introduce this legislation that will accelerate investment in clean vehicles and help lower emissions from the transportation sector,” said Sen. Warner. “This tax credit will help incentivize the use of clean, reliable, and affordable fuel sources and continue to aid the transition to a clean economy while creating good-paying jobs and reducing our reliance on foreign energy.”

“Renewable natural gas is a clean, affordable, and reliable fuel source that provide sustainable transportation for fuel industries across the country,” said Sen. Tillis. “This bill incentivizes the use of clean energy while promoting economic growth through lowering the cost of doing business and decreasing reliance on foreign energy. I am proud to introduce this commonsense legislation which will safeguard America’s energy independence.”  

Background:

Despite its ultra-low emissions and ability to deliver economic growth as a scalable alternative energy source, renewable natural gas received a lower tax credit than similar transportation fuels. The Renewable Natural Gas Incentive Act would create a $1.00 per gallon tax credit for sellers of renewable natural gas used for transportation.

Full text of the bill is available here. 

###