By the end of Tuesday’s US session, Bloomberg came out with the news suggesting that Treasury Secretary Steven Mnuchin could announce a second extension to the tax filing date to combat the coronavirus (COVID-19). The news takes clues from the Trump administration member’s interview with the media outlet.
Key quotes
‘It’s something I’m thinking about,’ he said Tuesday during a Bloomberg Invest Global virtual event. ‘As of now I’m not intending on doing that, but it’s something we may consider.’
The delay would give taxpayers additional time to file their tax returns and pay any balances due. The Internal Revenue Service in March extended the April 15 tax deadline to July 15. Mnuchin could extend the due date administratively, meaning he wouldn’t need Congress to approve the change.
Several groups, including the National Taxpayers Union and the National Treasury Employees Union, have asked the IRS to extend the tax due date.
A second delay would be akin to the IRS giving an interest-free loan to individuals and companies that owe the government money. Mnuchin said the first three-month delay injected about $300 billion of liquidity into the economy.
FX implications
Despite being an additional positive for the US equities, the news should ideally weigh on the risk-tone sentiment. The reason is the policymakers’ fear of the pandemic.
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