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Tax preparers are concerned that many of the millions of Americans receiving unemployment benefits due to the pandemic are unaware that they might owe money to the IRS next year, The Hill reported. Jobless benefits are subject to federal income taxes, as well as state income taxes in most parts of the country. But workers who are collecting benefits for the first time may not be aware of those tax implications, or they might opt against having taxes withheld from their benefit payments. People who do not have enough money withheld during the year could end up with smaller refunds or balances due to the IRS when they file their 2020 tax returns. “It’s a bigger issue now because the volume of people who are unemployed is higher than usual,” said Cari Weston, director for tax practice and ethics at the American Institute of CPAs. The coronavirus pandemic has led to the highest unemployment rate since the Great Depression and record numbers of workers applying for unemployment benefits. Tens of millions of Americans have filed claims for unemployment benefits since March.

A decade-long boom in auto lending threatens to unravel as payment deferrals end while unemployment remains high and stimulus measures fade, the Wall Street Journal reported. Borrowing for cars, trucks and SUVs rose more than 90 percent in the past decade, faster than all other types of borrowing except student loans, according to the Federal Reserve Bank of New York. Going into the downturn, auto debt outstanding was at a record $1.35 trillion and loan balances had never been higher. There were signs of trouble even before the crisis hit. According to the New York Fed, 5.1 percent of car loan balances were 90 or more days delinquent in the first quarter, only slightly below the peak of 5.3 percent in the financial crisis. The lending boom was fueled by banks and investors who believed auto loans were a safe way to get extra yield while interest rates were low. They were relying on lessons learned in the financial crisis when consumers defaulted on their mortgages but kept making car payments. The risk is that the excesses caused by a flood of investor cash into the mortgages could show up in auto lending. If defaults rise, it will test whether lenders, and the investors that enthusiastically backed the loans, can work out deals that prevent borrowers from losing their wheels. The stress will show up first in subprime loans, made to consumers with low credit scores. About a quarter of loans made to these borrowers were packaged and sold to investors last year under contracts that limit the changes that can be made, according to S&P Global Inc.

President Donald Trump said yesterday that he may take executive action to impose a moratorium on evictions and to enact a payroll tax holiday, with talks on a new virus-relief plan making slow progress in Congress, Bloomberg News reported. The White House is also exploring whether the president can act on his own to extend enhanced unemployment insurance payments that, like an eviction moratorium, were part of stimulus legislation enacted in March but now have expired. Later, Trump told reporters that he’s discussing suspending payroll taxes through an executive action. Trump spoke while Treasury Secretary Steven Mnuchin and Trump’s chief of staff, Mark Meadows, met at the Capitol with House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer. Both sides said after the two-hour meeting that they made some progress, and would convene again on today. “It was productive, we are moving down the track,” Pelosi said, adding that “we still have our differences.” The two sides are trying to close the gap between the $3.5 trillion Democratic plan passed by the House in May and the $1 trillion package of aid that Senate Republicans introduced last week.

The chairman of the Senate Banking Committee is calling on federal agencies to extend economic relief measures that Congress established in March, as lawmakers and the Trump administration struggle to reach a deal on the next round of aid, Politico reported. In a letter to housing and bank regulators, Senate Banking Chair Mike Crapo (R-Idaho) urged the officials to use their existing authority to continue eviction protections and looser lending rules — in effect doing an end run around Congress. "Although there are already early, encouraging signs that the U.S. economy is beginning to heal, federal financial regulators must remain diligent, and continue to provide relief in light of a pandemic and economic conditions that continue to evolve," he said in the letter sent Friday. Crapo sent the letter to leaders of the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., National Credit Union Administration, Department of Housing and Urban Development and the Federal Housing Finance Agency. The nature of the request suggests that Crapo believes that lawmakers might not be able to address the measures in the near future. The letter gives the agencies additional cover to take matters into their own hands. Eviction protections that Congress passed in March expired on July 24.