Raphael Stevens

A leading House Democrat demanded President Joe Biden replace IRS Commissioner Charles Rettig over the agency’s controversial destruction of data related to 30 million paper-filed tax returns.
“The IRS is vital to public confidence in our nation and its Trump-appointed leader has failed,” said Rep. Bill Pascrell, chair of the House Ways and Means Committee’s oversight subcommittee.
Tax preparers have told CNBC they fear the destruction of the documents could leave the IRS unable to verify details on a taxpayer’s returns, which in turn can lead to refunds being delayed.

Charles P. Rettig, commissioner of the Internal Revenue Service, testifies during the Senate Finance Committee hearing titled The IRS Fiscal Year 2022 Budget, in Dirksen Senate Office Building in Washington, D.C., June 8, 2021.
Tom Williams | Pool | Reuters

A leading House Democrat on Friday called on President Joe Biden to replace IRS Commissioner Charles Rettig over the agency’s controversial destruction of data related to 30 million paper-filed tax returns.
“The IRS is vital to public confidence in our nation and its Trump-appointed leader has failed,” said Rep. Bill Pascrell of New Jersey, chair of the oversight subcommittee of the powerful House Ways and Means Committee.

“This latest revelation adds to the public’s plummeting confidence in our unfair two-tier tax system,” Pascrell said.
“That confidence cannot recover if all the American people see at the IRS is incompetence and catastrophe,” the Democrat added. “The manner by which we are learning about the destruction of unprocessed paperwork is just the latest example of the lackadaisical attitude from Mr. Rettig.”
The White House did not immediately respond to requests for comment about Pascrell’s statement. An IRS spokesman had no immediate comment.
The call for Rettig’s ouster came after the Treasury Department’s inspector general for tax administration released the findings of an audit, which have angered tax preparers.
The audit revealed that the IRS has continued “to have a significant backlog of paper-filed individual and business tax returns that remain unprocessed” since the agency reopened tax processing centers in June 2020, months after the Covid-19 pandemic led to their shuttering.

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That inability to process backlogs of paper-filed returns “contributed to management’s decision to destroy an estimated 30 million paper-filed information return documents in March 2021,” the audit found.
Those documents can include W-2 forms and other information sent by employers and financial institutions to the IRS.
Tax preparers have told CNBC they fear the destruction of the documents could leave the IRS unable to verify details on a taxpayer’s returns, which in turn can lead to refunds being delayed.
“I was horrified when I read the report describing the destruction of paper-filed information returns,” said Phyllis Jo Kubey, president of the New York State Society of Enrolled Agents.
The IRS on Thursday night said that “99% of the information returns we used were matched to corresponding tax returns and processed,” while “the remaining 1% of those documents were destroyed due to a software limitation and to make room for new documents relevant to the pending 2021 filing season.”
“There were no negative taxpayer consequences as a result of this action,” the IRS said. “Taxpayers or payers have not been and will not be subject to penalties resulting from this action,” the agency said.
That explanation was not good enough for Pascrell, who said that Ways and Means Committee members and other members of Congress “have shown immense patience with the IRS.”
“The career IRS staff have performed admirably while under immense pressure, strained resources and nearly impossible circumstances during this pandemic,” Pascrell said. “Republican sabotage of this agency over the past decade have exacerbated these challenges. In our hearings, I have shown repeated deference to the work to reform the IRS but enough is enough.”
He continued later in the statement: “This latest revelation adds to the public’s plummeting confidence in our unfair two-tier tax system. That confidence cannot recover if all the American people see at the IRS is incompetence and catastrophe.”
“Mr. Rettig has had plenty of time and plenty of cooperation to begin the crucial work of fixing the IRS. There needs to be real accountability. President Biden must replace Mr. Rettig immediately and also nominate a Chief Counsel for IRS.”
— CNBC’s Kate Dore contributed to this report.

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An audit revealed the IRS has destroyed data for millions of filers, sparking anger from the tax community.
However, the IRS insists there have been no negative taxpayer consequences.
“Taxpayers have not been and will not be subject to penalties resulting from this action,” the agency said in a statement.

alfexe | iStock | Getty Images

Filers won’t be affected by the IRS decision to destroy data for millions of taxpayers, the agency said in a statement Thursday.
The IRS tossed an estimated 30 million so-called paper-filed information returns in March 2021, according to an audit by the Treasury Inspector General for Tax Administration.

The news has sparked anger in the tax community, many of whom worry about the agency’s ability to verify returns, triggering more error notices, especially with limited ways to reach the IRS.
“We processed 3.2 billion information returns in 2020. Information returns are not tax returns, and they are documents submitted to the IRS by third-party payors, not taxpayers,” the IRS said in its statement.
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The agency said 99% of the information returns were already processed, and the remaining 1% were destroyed due to a “software limitation,” making room for the 2021 filing season.
“There were no negative taxpayer consequences as a result of this action. Taxpayers or payers have not been and will not be subject to penalties resulting from this action,” the agency said.

The agency said the situation reflects “significant issues posed by antiquated IRS technology.” In 2020, the IRS prioritized backlogged returns to deliver refunds and other Covid-19 relief over processing less than 1% of paper information returns — mostly Form 1099s.
System constraints require the IRS to process paper forms by the end of the calendar year in which they were received, the agency said.

“Not processing these information returns did not impact original return filing by taxpayers in any way as taxpayers received their own copy to use in filing an accurate return,” the IRS said.
“The IRS is planning to process all paper information returns received in 2021 and 2022,” the agency added.
However, Rep. Bill Pascrell Jr., D-N.J., chair of the oversight subcommittee of the House Ways and Means Committee, on Friday demanded that President Joe Biden replace IRS Commissioner Charles Rettig over the incident.
“The IRS is vital to public confidence in our nation and its Trump-appointed leader has failed,” Pascrell said, pointing to the public’s “plummeting confidence” in the tax system.

“The manner by which we are learning about the destruction of unprocessed paperwork is just the latest example of the lackadaisical attitude from Mr. Rettig,” he added.
Edward Karl, vice president of taxation at the American Institute of CPAs, also voiced concerns on Friday.
“IRS management’s decision to destroy information return documents due to the processing backlog raised numerous questions regarding IRS’ decision making and risk assessment process,” he said.
“The IRS’ recent statement provided some of the answers, but American taxpayers deserve to know why this decision was made, and how it might impact them,” Karl said. “The IRS should continue to operate with transparency on this issue.”
— CNBC’s Dan Mangan contributed to this report

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SeatGeek says NFL tickets on the secondary market are selling for more than they did before the Covid pandemic.
The high ticket prices are an indication that people are still spending big on live entertainment and sports despite inflation being at a 40-year high.
SeatGeek CEO Jack Groetzinger predicted the “next few years for live entertainment will be gangbuster years.” 

Tom Brady (12) of the Buccaneers shakes hands with Patrick Mahomes (15) of the Chiefs after the regular season game between the Kansas City Chiefs and the Tampa Bay Buccaneers on November 29, 2020 at Raymond James Stadium in Tampa, Florida.
Cliff Welch | Icon Sportswire | Getty Images

Tickets for the upcoming NFL season are selling at a lower average price on secondary market platform SeatGeek out of the gate than they were a year ago, the company said, but they’re still higher than pre-pandemic levels.
Ticket prices averaged $307 immediately following the release of the NFL’s schedule Thursday. Fans were particularly interested in marquee matchups, such as star quarterback Patrick Mahomes of the Kansas City Chiefs taking on NFL legend Tom Brady of the Tampa Bay Buccaneers.

That price is down from an average of $411 out the gate last year, but it’s higher than the average of $305 in 2020, when games were restricted due to Covid. The average in 2019 was $258. Ticket prices usually fluctuate throughout the NFL season as demand changes.
The high ticket prices are an indication that people are still spending big on live entertainment and sports despite inflation being at a 40-year high. “I think people want high-end experiences, want to get out, and they’ve been pent-up for several years now,” Endeavor CEO Ari Emanuel said Friday on CNBC’s “Squawk Box.” He added, “People want to get out; they want to have experiences. They want to live life a little bit.”
SeatGeek CEO Jack Groetzinger, in an interview with CNBC on Thursday, predicted the “next few years for live entertainment will be gangbuster years.” 
SeatGeek said the Chiefs versus Bucs in Week 4 — featuring Mahomes and Brady — is the top-selling game so far. It is a rematch of Super Bowl LV in 2021, when the Buccaneers beat the Chiefs, 31-9. The most expensive seat for the Oct. 2 game surpassed $3,000 entering Friday. 
The legendary NFL quarterback appeared to retire this offseason before announcing in April that he planned to return, after all. When he finally decides to step away, Brady will transition to TV after he agreed to a deal with Fox Sports for more than $300 million.

Tickets to see the Dallas Cowboys, Bills, Rams, and Cincinnati Bengals round out SeatGeek’s top five selling teams entering the weekend.
Rival ticket company Vivid Seats said tickets for Russell Wilson’s return to Seattle on Sept. 12 saw some of the quickest demand out of the gate. Prices for this game averaged $451 per ticket. The Seahawks traded their longtime quarterback to the Broncos in March. And Wilson’s return could be the most in-demand Seahawks ticket since 2019, Vivid Seats projected.
The NFL kicks off its 18-week schedule with the Buffalo Bills visiting the Super Bowl champion Los Angeles Rams on Sept. 8 at SoFi Stadium. The game will air on the NBC network, whose parent company, NBCUniversal, also owns CNBC.

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Annual inflation rose by 8.3% in April, hovering near a 40-year high, the U.S. Department of Labor reported.
But some retirees may be shielded from certain swelling costs, according to J.P. Morgan.

A shopper at a San Francisco grocery store on May 2, 2022.
David Paul Morris | Bloomberg | Getty Images

Inflation is a growing concern as Americans spend hundreds more every month. But some retirees may avoid the sting of price hikes for gasoline, groceries and other costs.  
Annual inflation rose by 8.3% in April, hovering near a 40-year high, according to the U.S. Department of Labor.More than half of Americans expect rising expenses to have a “big negative impact” on long-term financial goals, such as retiring comfortably.

More from Personal Finance:How to calculate your own personal inflation rateHow fast does inflation cut buying power? A simple guideWhat consumers plan to cut back on if prices keep going up
But spending changes throughout people’s golden years may reduce the impact of some rising costs, according to J.P. Morgan’s 2022 Guide to Retirement.
“It’s getting below the headline,” said Katherine Roy, chief retirement strategist at J.P. Morgan, explaining how the basket of goods retirees purchase may shift over time.
Although gasoline prices spiked to another record high this week, older households tend to spend less on transportation than families ages 35 to 44, making them less vulnerable, the report found.
And some retirees may have the flexibility to buy less gas by combining trips or sharing rides, said certified financial planner Catherine Valega, a wealth consultant at Green Bee Advisory in the greater Boston area.

“I don’t think we need to panic,” added Valega, explaining how price changes may be a chance to revisit budgets and long-term plans.

While J.P. Morgan suggests using a separate line item for the rising cost of health care, with a 6% growth rate, other spending categories may only inflate by 1.5% to 2% annually, Roy said.
If you pull out health care, retirees tend to spend less in real terms until age 80 on other categories, she said.
These findings align with a SmartAsset analysis showing retirement spending decreases in 11 of the 14 core categories found in the U.S. Bureau of Labor Statistics Consumer Expenditure Survey.
Although the rising cost of health care is a concern, it’s not enough to offset the decreases in retirees’ spending on housing, food and transportation, said CFP Anthony Watson, founder and president of Thrive Retirement Specialists in Dearborn, Michigan.
“For the majority of people, those other expenses go down over time,” he said.

For the majority of people, those other expenses go down over time.

Anthony Watson
Founder and president of Thrive Retirement Specialists

Of course, rising costs may currently be hardest on lowest-income households, which tend to experience higher inflation rates, according to a working paper from the National Bureau of Economic Research.
However, it’s important for retirees to have a long-term perspective when it comes to inflation, the J.P. Morgan report contends.
“It’s just a point in time and what matters is the average,” Watson said.
“Yes, we’re experiencing high inflation right now,” Roy added. “But we’ve come out of a historically low period for a really long time.”

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Consumers are using “buy now, pay later” on just about anything.
However, there are risks with this type of debt and little regulatory oversight to sufficiently protect borrowers.

Most people love the convenience of buy now, pay later.
Since the start of the coronavirus pandemic, installment payments have exploded in popularity along with a general surge in online shopping.

Initially, spreading out the cost of a big-ticket purchase — like a Peloton, for example — just made financial sense, especially at 0%.
Now, 4 in 5 U.S. consumers use BNPL on everything from clothing to cleaning supplies, according to Experian, and most shoppers said buy now, pay later could replace their traditional payment method (likely, credit cards).
More from Personal Finance:More Americans are living paycheck to paycheck Inflation is costing U.S. household $311 a monthHere’s what consumers plan to cut back on
“It’s hard to buy anything anymore without being asked if you want to pay over time,” said Marshall Lux, a fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School.
These days, most consumers will see a buy now, pay later option when shopping online at retailers like Target, Walmart and Amazon, and many providers are introducing browser extensions, as well, which you can download and apply to any online purchase. Then there are the apps, which let you use installment payments when buying things in person, too — just like you would use Apple Pay.

“Three years ago, people talked about Peloton bikes, now people are buying sneakers, jeans, socks,” Lux said. “When people start buying household goods on credit, that signals a problem.”

When people start buying household goods on credit, that signals a problem.

Marshall Lux
Fellow at the Harvard Kennedy School

In addition, BNPL’s rapid growth is driven primarily by younger consumers, with two-thirds of BNPL borrowers considered subprime, Lux noted, making them especially vulnerable to economic shocks or a possible downturn.
“These are the people that can’t afford to be hurt,” he said.
Further, nearly 70% of buy now, pay later users admit to spending more than they would if they had to pay for everything upfront, according to a survey from LendingTree.
In fact, 42% of consumers who’ve taken out a buy now, pay later loan have made a late payment on one of those loans, LendingTree found.
Gen Zers are more likely to miss a payment and tap BNPL for everyday purchases rather than big-ticket items, according to a separate survey by polling site Piplsay.

Generally, if you miss a payment there could be late fees, deferred interest or other penalties, depending on the lender. (CNBC’s Select has a full roundup of fees, APRs, whether a credit check is performed, and if the provider reports to the credit scoring companies, in which case a late payment could also ding your credit score.)
Although, “they won’t come for your sneakers, the fact that you can buy something and not know what happens when you default — for the average person working paycheck to paycheck, this becomes a problem,” said Lux. “It feels a little Wild West-y to me.”
Without much regulatory oversight, the BNPL market currently exists in “a legal gray space,” according to Lux.
“Let’s stress-test this,” he said. “It has the potential to be a pretty big bubble.”

The Consumer Financial Protection Bureau has opened an inquiry into popular buy now, pay later programs.
The financial watchdog said it is particularly concerned about how these programs impact consumer debt accumulation, as well as what consumer protection laws apply and how the payment providers harvest data.
“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately, too,” CFPB Director Rohit Chopra said in a statement.
The CFPB has not yet announced its next steps.
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The airline is the first of the major carriers to strike a deal with its pilots.
United reached unique deals with its pilots during the pandemic to keep them trained for a rebound.
The deal likely includes higher pay and other improvements for pilots.

Boeing 777ER United Airlines. Aircraft to Fiumicino Leonardo da Vinci Airport.
Massimo Insabato | Mondadori Portfolio | Getty Images

United Airlines and its pilots’ labor union have reached an agreement on new contract terms, the first of the major carriers to strike a deal since the start of the pandemic. The crisis roiled the industry and exacerbated a pilot shortage and training backlog.
The Air Line Pilots Association and United didn’t disclose the terms of the deal on Friday, but they will likely include higher pay and other improvements.

United has had perhaps the least contentious relationship with its pilots unions of the major carriers and struck early deals with the airline to keep pilots on staff and trained during the pandemic.
“United Airlines was the only airline to work with our pilots union to reach an agreement during COVID,” CEO Scott Kirby said in a LinkedIn post. “It’s not surprising that we are now the first airline to get an Agreement in Principle for an industry leading new pilot contract.”
The agreement still faces a vote by the union and later, by pilots.
Delta Air Lines, Southwest Airlines and American Airlines are still in negotiations with pilot unions, which have organized pickets in recent months to protest grueling schedules.
United isn’t immune to the pilot shortage. The Chicago-based airline, like other carriers, has had to cut back on routes and park planes because of a shortage of pilots that fly for the smaller regional carriers that feed its network.
On Friday at 1 p.m. ET, Sen. Kyrsten Sinema, D-Ariz., will hold a hearing on the future aviation workforce, which will be held at the United Aviate Academy, United’s new flight school, in Goodyear, Arizona.

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Novavax executives said this week that they’re confident the Food and Drug Administration’s advisory committee will recommend the shot for use in the adult population.
If the FDA committee endorses the shot in June, the drug regulator is almost certain to rapidly authorize it for use in the U.S.
CCO John Trizzino said Novavax also aims to have an updated shot that targets omicron ready for October should the U.S. decide to redesign the vaccines for a fall vaccination campaign.

A health worker prepares a dose of the Novavax vaccine as the Dutch Health Service Organization starts with the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.
Patrick Van Katwijk | Getty Images

Novavax is confident its Covid-19 vaccine will receive the endorsement of the Food and Drug Administration’s advisory committee early this summer, executives said this week.
The FDA committee is scheduled to meet on June 7 to review Novavax’s submission. An endorsement from the committee, which is made up of independent experts, would mean the drug regulator is almost certain to quickly authorize the two-dose vaccine for use in the U.S.

CEO Stanley Erck said this week that Novavax’s manufacturing partner in India, Serum Institute of India, has successfully completed an FDA inspection. Erck told analysts during the company’s first-quarter earnings call that he fully expects the committee will authorize the vaccine for adults.
Chief Commercial Officer John Trizzino, in an interview with Bank of America, said all signs point toward a positive recommendation from the committee next month.
“We’re fully expecting based upon our submission, based upon all the back and forth questions that have been asked and answered, based upon the inspection at Serum, to come out of that meeting with a recommendation for emergency use authorization,” Trizzino said during Bank of America’s virtual health-care conference on Wednesday evening.
The FDA has been reviewing Novavax’s submission for months. The vaccine maker asked the drug regulator to authorize the vaccine in January, but federal health officials said the application was complex.
“This is an incredibly complex review process that involves review of not just clinical data but also manufacturing data that will be needed to make a determination about emergency use authorization,” Dr. Doran Fink, deputy director of clinical review at the FDA’s vaccine division, told the Centers for Disease Control and Prevention’s committee of independent vaccine advisors last month.

If Novavax’s vaccine is authorized by the FDA, it will be first new shot to hit the market in the U.S. in more than a year. Pfizer, Moderna and Johnson & Johnson are the three vaccines currently used in the U.S., and the FDA last week limited the use of J&J’s shots.
The vaccine would enter the U.S. market at a time when 76% of adults are already fully vaccinated. Trizzino said on Wednesday that Novavax’s shots would offer choice to the remainder of the adult population that would prefer not to receive an mRNA vaccine. Novavax’s vaccine uses more conventional protein technology, whereas Pfizer’s and Moderna’s use messenger RNA platforms first authorized during the coronavirus pandemic. Trizzino said the shots could also play an important role as booster doses and in teenagers ages 12 to 17.
Novavax has submitted its data from teenagers to the FDA and is also filing data on booster doses, Chief Medical Officer Philip Dubovsky said during the company’s earnings call. It’s unclear, however, when the FDA may consider the company’s shots for teens and as booster doses.
FDA authorization of the vaccine would come right as the drug regulator is considering redesigning Covid shots this fall to target mutations the virus has developed over the past two years. All of the current vaccines, including Novavax, target the spike protein of the original strain of the virus that emerged in Wuhan, China, in 2019. As the virus has evolved, the shots have become less effective at blocking infections.
Novavax plans to launch a clinical trial this month on a version of the vaccine that targets omicron mutations, Erck said during the company’s earnings call. Trizzino, during the Bank of America interview, said the goal is to have the shots ready by October for a fall vaccination campaign should the FDA decide to move forward with updating the shots.
“Our thinking is in the fall, we need to be ready to do what our customer wants,” Trizzino said, referring to the U.S. government. “We intend to have the clinical data, the package that’s filed for that and then be able to deploy in the timeframe of October.”
It’s unclear how many shots the U.S. government would order should the vaccine receive authorization. Erck said Novavax is in discussions now with the U.S. on how the company can support demand. Novavax has received $1.8 billion from the U.S. government under Operation Warp Speed to deliver 100 million doses, though the government will decide how many shots it wants after FDA authorization.
Novavax stock has dropped 13% this week due to uncertain demand for the shots and after the company missed Wall Street’s first-quarter earnings and revenue expectations. Although Novavax maintained its 2022 sales guidance of $4 billion to $5 billion, CFO Jim Kelly said the company has not yet received an order from COVAX, the international alliance that procures shots for poorer nations. It’s unclear how much COVAX may order, Kelly said, which could put downward pressure on the sales guidance.
Last year, Novavax signed a memorandum of understanding to make 1.1 billion doses of its vaccine available to COVAX, and the company previously said it has the capacity to manufacture 2 billion doses in 2022. However, Novavax’s vaccine rollout around the world has gotten off to a sluggish start this year.
Novavax delivered 42 million doses in the first quarter to markets where the vaccine is already authorized, including the European Union, Canada, South Korea, Australia, New Zealand and Indonesia. However, the company expects shipments and revenue to increase in the second quarter as its fulfills an order of 42 million doses from the EU, Trizzino told analysts during the earnings call.
Novavax’s vaccine uses different technology than Pfizer’s and Moderna’s shots. The Pfizer and Moderna vaccines deliver mRNA to the body’s cells, which then produce harmless copies of the virus spike protein, which induces an immune response that fights Covid. The spike protein is the tool the virus uses to invade human cells.
Novavax’s fully synthesizes the copies of the spike protein outside the human body. The company inserts the genetic code for spike in a baculovirus which then infects cells for a certain type of moth. Novavax then harvests the spike from those cells and purifies them for the shot. The vaccine also uses what’s known as adjuvant, purified from the bark of a South American tree, to boost the immune response.
Novavax’s U.S. and Mexico clinical trial found that its vaccine was 90% effective at preventing mild illness and 100% effective at preventing severe illness. However, the trial was conducted well before the omicron variant emerged, which has undermined vaccine effectiveness against infection.
Novavax released results from a lab study in December which found that its vaccine still triggered an immune response against omicron. The study found that a third boosted the immune response to levels similar to the U.S. and Mexico clinical trial, suggesting a high level of protection with a third shot.

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