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The <a href="http://www.businessinsider.in/searchresult.cms?query=income+tax+department&amp;sortorder=effectivedate">Income Tax officials</a> are working on Operation Clean Money-a dedicated portal to investigate <keyword id="91729" type="UNKNOWN" weightage="20" keywordseo="Tax-defaulters">tax defaulters</keyword>. The portal, which was launched after <a href="http://www.businessinsider.in/searchresult.cms?query=demonetisation&amp;sortorder=effectivedate">demonetisation</a> move, will identify tax defaulters with <a href="http://www.businessinsider.in/searchresult.cms?query=pan&amp;sortorder=effectivedate">PAN</a> and look into individuals who have deposits or large purchases not in line with declared income. One of the main aim of the portal is to have minimum involvement. "We are working on a dedicated portal. This will be for those identified as part of Operation Clean Money,” a top government official aware of the deliberations told ET.” The Operation Clean Money will also focus on high-risk individuals who made high-value transactions. They will be questioned by the tax department and already, over 60,000 such people have been identified. As <a href="http://www.businessinsider.in/searchresult.cms?query=black+money&amp;sortorder=effectivedate">black money</a> crackdown remains of the top priorities of the government, this portal will ensure focused and non-intrusive interaction between tax authorities and suspected evaders. The Prime Minister was given a detailed presentation on Operation Clean Money and various actions taken by the apex direct taxes body, <keyword id="121964" type="ORGANIZATION" weightage="20" keywordseo="Central-Board-of-Direct-Taxes">Central Board of Direct Taxes</keyword> (CBDT). The department has identified about 1.8 million persons through the portal who were contacted through SMSes and emails and asked to explain their deposits, pay tax or declare past undisclosed income through the Pradhan Mantri Garib Kalyan Yojana.

Tax officials to have names of defaulters on a dedicated portal; identification process to be non-intrusive

The Income Tax department has come up with several measures to keep an eye on tax defaulters and control their illicit activities. As per reports, these measures involve "blocking" the Permanent Account Numbers (PAN) of such entities, while also getting their LPG subsidies cancelled so that they do not stand eligible for further loans. 
 
These measures will be undertaken this financial year itself, so that the threat of tax avoidance can be tackled with. 
 
The PANs will be blocked in such a way "that these defaulters are not sanctioned any loans or overdraft facility by public sector banks, as the same is bound to become non-performing assets," says the strategy paper prepared by the taxmen. 
 
"Ministry of Finance can be suggested to withdraw facility like LPG subsidy which is directly credited to the bank accounts of the said defaulters," it added. 
 The department has also proposed to reveal the identities of these <keyword id="3434878" type="UNKNOWN" weightage="100" keywordseo="blocked-PANs">blocked PANs</keyword> to the Registrar of Properties, so that the defaulters are not allowed any registration of immovable properties. 
 
<a href="https://s.yimg.com/os/publish-images/finance/2015-09-02/ff446b60-516c-11e5-9ff8-7da1c9e0ffd8_14tax.jpg">Image source</a>

Not paying taxes? I-T department will block your PAN and LPG subsidies

New Delhi, Feb 9 () The Income Tax Department has detected about Rs 470 crore TDS (tax deducted at source) default by some big Delhi-based corporate houses after surveys were conducted against them recently, officials said. The department's TDS wing in Delhi has launched a special monitoring of private companies and government organisations in order to ensure that due taxes are deducted under this direct taxes category in the last quarter of this financial year that ends on March 31. TDS contributes to over 40 per cent of collection under the direct taxes category. Officials said the national capital-based TDS wing recently visited the premises of a budget hotels and guest houses aggregator firm and found it had allegedly not deducted tax (TDS) on about Rs 280 crore payments that were made on rentals over a seven-year period. Similarly, an airlines company was found defaulting on Rs 115 crore TDS payments and some firms involved in the real estate sector were in a default of Rs 75 crore. The realty groups were also charged with wrong deduction of taxes by applying wrong rates of TDS and hence deducting taxes at lower rates, they said. Officials did not disclose the identity of the firms. In two other cases, the officials said, defaulting entities have been convicted by local courts in the Delhi region on charges of wrong deduction or default of TDS. In the first case, a fine of Rs 6 lakh was imposed while in the second, a six month imprisonment was accompanied with Rs five lakh fine. As per rules, tax collected or deducted at source shall be paid to the credit of the central government within seven days from the end of the month in which the deduction is made. The I-T department has begun conducting an increased number of surveys (visiting business premises of a company for audit checks) to check violations like non-remittance of TDS deducted, non-filing of returns and deductions made at a lower rate after it was seen that the deductors were defaulting on these payments. NES SMNSMN

I-T detects Rs 470 crore TDS default by airline, real estate, hotel cos in Delhi

New Delhi, Mar 4 () The Income Tax Department has detected TDS default of more than Rs 3,500 crore after it surveyed a major oil company and a telecom operator in the national capital, the CBDT said on Wednesday.It called these instances a "major breakthrough".In the case of the oil firm, the CBDT said that Tax Deducted at Source (TDS) default of about Rs 3,200 crore was detected. "The defaults included short deduction of tax and non-deduction of tax, respectively. Short deduction of tax pertained to TDS under section 194J (of the I-T Act) for several years on payment of fee for technical services for installation and maintenance of high-tech oil refineries, payments for chemical process of re-gasification and transportation of LNG," it said. "Default of non-deduction was detected on composite contracts involving service and purchase of products on which TDS at the rate of 2 per cent should have been deducted, but which was not deducted resulting in the said default," the CBDT said in a statement.In the case of the telecom firm, the TDS default amounts to Rs 324 crore."The company did not make the required TDS of 10 per cent under section 194J of the I-T Act on technical contracts worth Rs 4,000 crore. The amount is further liable to go up once the enquiry is completed," it said.The Central Board of Direct Taxes (CBDT), which frames policy for the tax department, did not name the entities involved.In a similar action, the department found several hospitals in Delhi were "openly flouting" norms of TDS and Tax Collected at Source (TCS) and were paying less tax to the department. "During survey at two premier hospitals, one with more than 2,500 bed capacity and another with 700 beds, it was found that the former was not making any TDS on construction contracts as statutorily required while the latter was deducting tax at the rate of 10 per cent only on salary paid to doctors, instead of the present TDS rate of 30 per cent applicable for salary payments," the CBDT said.It added that enquiries made during the survey revealed that the terms of appointment between the hospital and the doctors indicated an employer-employee relationship on which the hospital was required to deduct tax at 30 per cent instead of 10 per cent as was being made by the hospital. "TDS defaults of Rs 70 crore and Rs 20 crore, respectively were detected in the said hospitals," the statement said. Further probe found that the hospitals were also "not making" the required TDS at 10 per cent from the maintenance charges paid for the hi-tech sophisticated operation theatre and diagnostic equipments. It had also been seen that many hospitals were still not complying with the TCS norms that came into effect from June 1, 2016 under which, on any cash payment received in excess of Rs 2 lakh, the hospital was required to collect TCS at the rate of 1 per cent and deposit it to the government account. The department detected similar irregularity or TDS default in the case of a real estate group of Delhi against which it conducted a survey early this week."Verification and analysis indicated outstanding TDS liability and interest payable of Rs 214 crore," it said.The CBDT said the department has stepped up enforcement action against TDS default cases as this category of revenue contributes to more than 45 per cent of the total direct tax collection in the country. As per the rules, it said TDS has to be paid to the credit of the central government within seven days from the end of the month in which the deduction is made. NES KJ

I-T unearths over Rs 3,500-cr TDS default by oil, telecom firm in Delhi

The new tax regime (<keyword id="6354892" type="General" weightage="80" keywordseo="ntr" source="Orion">NTR</keyword>) will now be considered as a default regime, but it may not necessarily be a better option for all the taxpayers, experts said. Preeti <keyword id="445" type="General" weightage="80" keywordseo="sharma" source="Orion">Sharma</keyword>, Partner, Tax and Regulatory Services, BDO India, said that <keyword id="25455" type="General" weightage="50" keywordseo="finance" source="Orion">Finance</keyword> Minister <keyword id="129243" type="General" weightage="50" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> has made conscious efforts to make the NTR more attractive for the taxpayers. "The NTR shall now be considered as a default regime for all the taxpayers, but that does not necessarily mean a better regime for all. Taxpayers still need to look at their personal situation, various investments and expenditure that are eligible for tax exemption under the old regime and then decide which regime is better for them," Sharma said. Although the NTR is the default regime, an individual still has the option to opt for the old regime if the same is more beneficial in terms of tax outflow, Sharma said. Deepashree Shetty, Associate Partner, Tax and Regulatory Services, BDO India, said several measures have been introduced to promote the NTR for individual taxpayers. These include increasing the basic exemption limit, change in the income slabs, extending the scope of tax rebate, extension of standard deduction, etc. The proposal to make NTR as the default tax regime supports the government's initiative to digitise and simplify the tax process for individuals. This would also mean significant changes in the payroll procedures of employers for salaried taxpayers, Shetty said. The income in personal income tax is expected to raise disposable incomes and transition the taxpayers to the new tax regime. Suman Chowdhury, Executive Director and Chief Analytical Officer, Acuite Ratings &amp; Research, said, "The rationalisation of the personal income tax structure is expected to lead to two things (i) raise disposable incomes for the middle class, particularly the younger taxpayers (ii) transition of the taxpayers to the new tax regime with minimal exemptions and lower and simpler tax slabs. This is expected to give a moderate boost to domestic consumption." S. Ranganathan, Head of Research at LKP Securities, said, "Thee Budget has put more money in the hands of the people through relief from income tax which to our mind is a very positive step." <keyword id="679937" type="General" weightage="80" keywordseo="sitharaman" source="Orion">Sitharaman</keyword> on Wednesday announced new tax slabs for 2023-24, under which no tax will be payable for income up to Rs 7 lakh per annum under the new income tax regime. "Currently, those with an income of up to Rs 5 lakh don't pay any income tax. I proposed to increase the tax rebate limit to Rs 7 lakh in the new tax regime," Sitharaman said in her Budget speech. A tax of 5 per cent would be levied on total income between Rs 3 lakh and Rs 6 lakh, 10 per cent tax would be imposed on income between Rs 6 lakh and Rs 9 lakh, while it will be 15 per cent on income between the range of Rs 9 lakh and Rs 12 lakh. On the income range of Rs 12 lakh to Rs 15 lakh, 20 per cent tax would be levied, while the tax would be 30 per cent on an income slab of Rs 15 lakh and above, the finance minister informed. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/income-tax-bonanza-capex-push-emerge-as-the-stars-of-budget-2023-24/articleshow/97521646.cms">Income tax bonanza, capex push emerge as the stars of Budget 2023-24</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/budget-for-stipend-to-47-lakh-youth-under-apprenticeship-scheme/articleshow/97522243.cms">Budget for stipend to 47 lakh youth under apprenticeship scheme</a>

New tax regime may not be necessarily beneficial for all taxpayers: Experts

<ul class="summary-list"><li>Sen. Warren requested student-loan borrowers in <keyword id="12136284" type="UNKNOWN" weightage="60" keywordseo="default" source="Orion">default</keyword> be automatically returned to good standing.</li><li>8 million borrowers are behind on payments, causing wage garnishment and child tax credit seizure.</li></ul>When the pause on student-loan payments ends in 74 days, 8 million borrowers will re-enter the system already behind on their bills. Massachusetts Sen. <keyword id="11984291" type="UNKNOWN" weightage="60" keywordseo="elizabeth-warren" source="Orion">Elizabeth Warren</keyword> wants to make sure they don't lose out on wages and child tax credits as punishment.On Thursday, Warren led eight of her Democratic colleagues, including Vermont Sen. <keyword id="11896860" type="UNKNOWN" weightage="60" keywordseo="bernie-sanders" source="Orion">Bernie Sanders</keyword>, in sending a <a href="https://www.warren.senate.gov/imo/media/doc/2021.11.18%20Letter%20to%20ED%20re%20student%20loan%20borrowers%20in%20default.pdf">letter</a> to Education Secretary Miguel Cardona requesting he remove the default status from 8 million student-loan borrowers automatically. The letter noted that a disproportionate number of borrowers in default are low-income and communities of color, and throwing them back into repayment will only undermine the country's economic recovery."If these borrowers remain in default when student loan payments and collections resume, they will be subject to wage garnishment, tax refund withholding, and aggressive collections practices," the Democrats wrote. "Millions of families could see their Earned Income Tax Credit and Child Tax Credit refund payments withheld, undermining the effectiveness of President Joseph R. Biden's signature economic policies."Along with an automatic return to good standing, the lawmakers also requested the Education Department develop a <keyword id="11896048" type="UNKNOWN" weightage="60" keywordseo="policy" source="Orion">policy</keyword> for loan forgiveness in cases of a long-term default for a borrower where it is "unlikely" or "financially unfeasible" for the department to continue collecting payments.This follows Warren and Rep. Ayanna Pressley leading a group of Democrats in <a href="https://www.businessinsider.com/student-loan-debt-payment-pause-education-department-elizabeth-warren-pressley-2021-7">writing a letter</a> to Cardona in July with concerns of "plunging" borrowers back into repayment without a plan to protect their credit scores and financial stability.Insider <a href="https://www.businessinsider.com/student-loan-borrowers-in-default-after-pandemic-pause-debt-payments-2021-11">reported</a> on Tuesday that, according to Education Department data, 93% of the borrowers who entered the pandemic payment pause in default still are. During the payment pause, borrowers in default also had the opportunity to participate in the department's <a href="https://studentaid.gov/manage-loans/default/get-out">"rehabilitation" program</a>, which allowed borrowers to make nine monthly payments during the pause in order to be brought back into good standing. And given the payment pause, borrowers could count $0 payments toward their progress.But in order to participate in the program, borrowers had to complete significant amounts of paperwork and communicate with their student-loan company, which is <a href="https://www.businessinsider.com/student-loan-servicers-communication-debt-pile-borrowers-navient-pheaa-2021-7">no easy feat</a> and leaves many borrowers without the information they need to pay off their debt.The department is reportedly considering a <a href="https://www.businessinsider.com/student-loan-debt-payment-restart-safety-net-borrowers-education-department-2021-10">"safety net"</a> for borrowers once payments resume, one of which could include automatically erasing defaulted payments for 8 million borrowers and giving them a "fresh start." Details for those plans have yet to be finalized, though, and lawmakers and borrowers want answers not only on plans to restart payments, but on broad student-debt cancellation — something the Biden administration continues to be <a href="https://www.businessinsider.com/student-loan-debt-cancellation-trump-biden-memo-betsy-devos-2021-11">largely silent on</a>."Attempting to collect on this debt is likely not a cost-effective use of taxpayer dollars, and forgiving this debt would result in life-changing relief for the affected borrowers that could benefit our overall <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>," the lawmakers wrote. "Cancelling $50,000 of <keyword id="11896049" type="UNKNOWN" weightage="60" keywordseo="student-debt" source="Orion">student debt</keyword> would address this issue by relieving the student debt burden entirely for the vast majority borrowers."

8 million student-loan borrowers could lose out on wages and child tax credits when payments resume in 2 months. Elizabeth Warren wants Biden to ensure that won't happen.

After social media outrage over a Budget proposal making it mandatory to get <keyword id="22574399" type="General" weightage="100" keywordseo="tax-clearance-certificate" source="keywords">tax clearance certificate</keyword>s for going abroad, the government on Sunday clarified that the proposed amendment is not for all, and only those accused of financial irregularities or having substantial tax arrears need such clearance. The <keyword id="19955404" type="General" weightage="20" keywordseo="finance" source="keywords">finance</keyword> ministry, in the Finance Bill, 2024, has proposed to add the reference of the <keyword id="20961832" type="General" weightage="20" keywordseo="Black-Money-Act" source="keywords">Black Money Act</keyword>, 2015, to the list of Acts, under which any person should clear his liabilities to obtain the tax clearance certificate. "The proposed amendment does not require all the residents to obtain the tax clearance certificate," the ministry said in a statement. As per section 230 of the Income-tax Act, 1961, every person is not required to obtain a tax clearance certificate. Only in the case of certain persons, in respect of whom circumstances exist, which make it necessary to obtain a tax clearance certificate will be required to obtain such a certificate. The ministry said that the Income Tax department through a 2004 notification has specified that the tax clearance certificate may be required to be obtained by persons domiciled in India only in certain circumstances. These include - where the person is involved in <keyword id="22576180" type="General" weightage="20" keywordseo="serious-financial-irregularities" source="keywords">serious financial irregularities</keyword> and his presence is necessary in the investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or where the person has direct tax arrears exceeding Rs 10 lakh outstanding against him, which have not been stayed by any authority. The I-T department said that a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax. Such a certificate is required to be issued by the income-tax authority, stating that such person has no liabilities under the Income-tax Act, or the Wealth-tax Act, 1957, or the Gift-tax Act, 1958, or the Expenditure-tax Act, 1987, it added.

After outrage, Govt clarifies: tax clearance certificate only for people with tax dues, high-value defaulters

For curbing tax evasion and the proliferation of money, the Income Tax Department of India has taken several steps over the recent past. Not paying income tax in time is a serious offence. During last year, the number of persons convicted for tax evasion has increased by 269% which indicates the seriousness with which the government is viewing the tax defaulters. Here we discuss the different penalties for not paying income tax in time. Penalty for non-filing If an individual fails to file <keyword id="7876915" type="UNKNOWN" weightage="20" keywordseo="Form-1040">Form 1040</keyword>, he or she must use Form 4868 to seek an extension before April 15. This will avoid the accrual of penalties. Usually 5% per month is imposed as penalty for tax balances due. If there is a delay in filing tax returns, customers must pay the whole month’s charges irrespective of how much late they are in a given month. For instance, even if the returns are filed on the 1st of a particular month, the 5% penalty is charged for the month. IRS considers non-filing tax returns as a more serious offense than non-payment of tax. In any case, the penalty cannot exceed 25% of the total value of the taxes not paid by the customer. Penalty for non-payment Unpaid taxes invite penalties as follows. If a customer files the ITR or extension by 15th of April but does not pay the taxes within the same month, a penalty for non-payment which will equal 0.5% will be charged. Just like a non-filing penalty, non-payment penalty is usually calculated for every month or parts of the month in which the tax amount remains unpaid. In the same way as non-filing penalty, the penalty for non-payment can accrue till the time it touches the unpaid tax bill of the customer. Penalty for under-payment Under-payment penalty is applicable when a tax payer fails to make the full payment of the tax they owe. Taxes are supposed to be paid as and when the income is earned. The majority of tax payers who earn through salaries comply with this rule due to the fear that the income tax could be withheld from their paychecks. However, freelancers like independent contractors who make income from contractual jobs and those who make additional income other than their salaries need to ensure that they cover the tax due through their estimated tax payments. Other kinds of income like prize winning, earnings on investment and stock options also invite taxes. The individuals who earn through different kinds of untaxed income pay the money they owe at the time of filing ITR. Failing to pay the same will invite an underpayment penalty irrespective of whether you pay the whole tax due eventually. Why this discussion Filing the ITR in time and paying the taxes the tax payer owes to the government in time are considered as important duties of the citizens. Complying with this expectation can work for the advantage of the individual while defaulting on them can invite serious negative consequences.

How many penalties if we don't pay income tax on time

The <a href="http://www.businessinsider.in/searchresult.cms?query=supreme+court">Supreme Court</a> did not agree with banks that <a href="http://www.businessinsider.in/searchresult.cms?query=VIJAY+MALLYA">Vijay Mallya</a> should be personally present in the court. 
 
Instead, the apex court issued notices to Mallya, seeking his views on the petition filed for his presence in the court as banks said he had left the country. 
 
Attorney General Mukul Rohatgi, who sought such an order from the court, argued that Mallya’s Twitter messages showed that he may be in London and a court order would force him to come back to the country. 
 
READ ALSO: <a href="http://www.businessinsider.in/A-little-too-late-Mallya-flew-out-of-India-before-banks-could-take-a-stay-order-against-him/articleshow/51323634.cms">A little too late! Mallya flew out of India before banks could take a stay order against him</a> 
 
However, Justices Kurian Joseph and RF Nariman sought views from Mallya, United Breweries Holdings and the Indian Embassy in London, on the petition which wants him to disclose the details of all his assets to the court. 
 
Lenders are trying to recover loans worth a whopping Rs 9,000 crore from Mallya related to the now-defunct <a href="http://www.businessinsider.in/searchresult.cms?query=kingfisher+airlines">Kingfisher Airlines</a> founded by him. 
 
Mallya will have to reply to the notice by March 30, the next date of hearing. The applications also demanded that he furnish adequate guarantees to secure his presence in court. 
 
(Image: Indiatimes)

SC issues notice to Vijay Mallya, his presence may not be required in the court

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Drew Angerer/Getty ImagesBorrowers are treated like 'deadbeat parents and tax cheats.'</div></div></div>Borrowers who default on their student loans are pursued aggressively by the Department of <keyword id="6355445" type="COMPANY" weightage="60" keywordseo="Education">Education</keyword> and private debt collectors, facing garnished wages, withheld IRS tax returns, and decreased Social Security payments, <a href="http://www.Reuters.com/investigates/special-report/usa-studentloans/?utm_source=Twitter&amp;utm_medium=Social">Reuters reported.</a>"We treat struggling student-loan borrowers the same as deadbeat parents and tax cheats," Seth Frotman, a senior member of the Consumer Financial Protection Bureau (CFPB), told Reuters. "Even gambling addicts have more protections."Since 2015, $3 billion in garnished wages and $4.8 billion in seized tax refunds and Social Security benefits have been collected from defaulted borrowers, according to Reuters.Many of the 8 million borrowers currently in default on their loans are among the most financially vulnerable in society - and state and federal regulators allege that loan servicers intentionally point them away from affordable repayment plans, Reuters reported.The CFPB filed a lawsuit in early 2017 against Navient, the largest student-loan servicer in the US, claiming it added $4 billion in student loan debt by failing to offer income-based repayment plans to distressed borrowers. Instead, Navient repeatedly pushed borrowers toward forbearance, which is less costly for the company, but potentially more expensive for the borrower in the long run.Several state attorneys general have since filed similar suits.<h3><a href="http://www.reuters.com/investigates/special-report/usa-studentloans/?utm_source=Twitter&amp;utm_medium=Social">Read the entire Reuters investigation here &gt;&gt;</a></h3> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/5-scientifically-proven-things-make-you-less-attractive-2017-7">5 scientifically-proven things that can make you less attractive</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="F0aGJ0YjE66tcNRye2qFHVoc6d36DbYk" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

'Even gambling addicts have more protections' than student-loan borrowers

<ul class="summary-list"><li>Public Citizen led over 100 organizations in calling on Biden to cancel <keyword id="11896049" type="UNKNOWN" weightage="60" keywordseo="student-debt" source="Orion">student debt</keyword> or extend the payment pause.</li><li>They wrote that debt cancellation would protect defaulted borrowers from losing their <keyword id="11964084" type="UNKNOWN" weightage="60" keywordseo="child-tax-credit" source="Orion">child tax credit</keyword> payments.</li></ul>Falling behind on student-loan payments not only impacts borrowers' credit scores - it can prevent them from receiving critical benefits, like the child tax credit Biden starting sending out in July as monthly checks to families.Over 100 organizations said the 9 million defaulted borrowers cannot afford to lose additional benefits, and the best way to prevent that is student-debt cancellation.Public Citizen, a progressive nonprofit, led 104 organizations last week in sending a <a href="https://mkus3lurbh3lbztg254fzode-wpengine.netdna-ssl.com/wp-content/uploads/Coalition-letter-to-POTUS-re-student-debt_10.28.21_final.pdf">letter</a> to President Joe Biden urging student-debt cancellation before payments resume in February - and if he doesn't cancel student debt, they are pushing for an extension of the payment pause. The letter highlighted a number of benefits student debt cancellation would bring to borrowers, the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>, and racial justice, with one of those reasons being protecting borrowers with children who <a href="https://www.businessinsider.com/child-tax-credit-helping-parents-childcare-school-expenses-2021-10">rely on the child tax credi</a>t (CTC)."The nearly nine million borrowers who are in default on federal <keyword id="11896050" type="UNKNOWN" weightage="60" keywordseo="student-loans" source="Orion">student loans</keyword>, most of whom are low-income and many of whom have young children, will be subject to having their entire tax refunds including CTC" seized by the Treasury, the organizations wrote."For those student loan borrowers-and, most importantly, for their children-this entirely preventable outcome will unwind one of this administration's signature achievements," they added. "The time to act is now."Biden <a href="https://www.businessinsider.com/biden-strikes-deal-with-manchin-sinema-cuts-social-benefits-plan-2021-10">unveiled</a> a scaled-down $1.75 trillion social-spending framework last week that included a one-year extension of the child tax credit: a benefit of $3,600 per child age 5 and under, or $3,000 per kid between 6 and 17. As Insider <a href="https://www.businessinsider.com/child-tax-credit-helping-parents-childcare-school-expenses-2021-10">reported</a>, many parents are relying on those payments to cover basic expenses, like food and education, helping 61 million kids across the country.But those payments are at risk for parents who are behind on their student-loan payments. Defaulting on debt can cause wages to be garnished and payments like the CTC to be seized until the borrower gets caught up, hurting not only borrowers, but their families, too.Insider previously <a href="https://www.businessinsider.com/student-debt-relief-cancelation-seniors-older-americans-loan-repayment-2021-4">spoke to</a> David Wise, a 59-year-old borrower with $236,485 in outstanding student loans. A low salary caused him to fall behind on his monthly payments, leading his employer to garnish his wages, pushing him into default."I feel like I've actually been responsible, and I've paid a considerable amount of money on my student loans," Wise said. "But it really is a debtor's prison."Along with the advocacy groups, lawmakers also want to protect borrowers in default. In July, Massachusetts Sen. <keyword id="11984291" type="UNKNOWN" weightage="60" keywordseo="elizabeth-warren" source="Orion">Elizabeth Warren</keyword> and Rep. Ayanna Pressley led a group of Democrats in <a href="https://www.businessinsider.com/student-loan-debt-payment-pause-education-department-elizabeth-warren-pressley-2021-7">writing a letter</a> to Education Secretary <keyword id="11897873" type="UNKNOWN" weightage="60" keywordseo="miguel-cardona" source="Orion">Miguel Cardona</keyword> with concerns of "plunging" borrowers back into repayment without a plan to protect their credit scores and financial stability.The Education Department is reportedly preparing a "<a href="https://www.businessinsider.com/student-loan-debt-payment-restart-safety-net-borrowers-education-department-2021-10">safety net</a>" for when payments resume in February, including a potential "fresh start" plan to automatically erase debt for 7 million defaulted borrowers, but as Politico reported, those plans are not finalized yet and the department has yet to comment on them. While Biden has canceled student debt for <a href="https://www.businessinsider.com/student-loan-debt-cancellation-payment-pause-borrowers-disabilities-defrauded-2021-6">targeted groups</a> of borrowers, pressure is building for him to cancel student debt broadly. <a href="https://www.businessinsider.com/read-the-redacted-student-debt-cancellation-memo-biden-education-department-2021-11">Newly released documents</a> revealed that a memo assessing Biden's authority for broad student debt cancellation has existed since April - his administration <a href="https://www.businessinsider.com/student-debt-cancellation-proof-of-april-memo-biden-cardona-education-2021-10">just won't reveal</a> what the memo says."Canceling student debt would ensure we are not punishing those who ultimately could not finish their education with years of default, bad credit, and personal stigma," the organizations wrote.

Student-loan borrowers who default could have their child tax credit payments seized - something that's 'entirely preventable' if Biden cancels student debt now, 105 organizations say

You Searched For "Tax defaulters" and got 11 results

Tax officials to have names of defaulters on a dedicated portal; identification process to be non-intrusive

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8 million student-loan borrowers could lose out on wages and child tax credits when payments resume in 2 months. Elizabeth Warren wants Biden to ensure that won't happen.

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Student-loan borrowers who default could have their child tax credit payments seized - something that's 'entirely preventable' if Biden cancels student debt now, 105 organizations say

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