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Tax identity theft victims are waiting roughly 19 months for the IRS to process returns and send refunds, according to the National Taxpayer Advocate.
In fiscal 2023, shifted resources have contributed to the problem as the agency has prioritized areas such as phone service.

Erin Collins, national taxpayer advocate at the Taxpayer Advocate Service, speaks at a Senate Appropriations subcommittee hearing in Washington, D.C., on May 19, 2021.
Bloomberg | Bloomberg | Getty Images

After a few difficult years, the IRS has boosted taxpayer service and technology with an infusion of funding. But there’s still room for improvement — especially for tax identity theft victims, according to the agency’s internal watchdog.
The National Taxpayer Advocate on Wednesday released its annual report to Congress, which cited “unconscionable delays” in IRS support for victims of tax-related identity theft.

“Individuals who are victims of tax-related identity theft are waiting an average of nearly 19 months for the IRS to process their returns and send their refunds,” wrote National Taxpayer Advocate Erin Collins.
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Shifted resources contributed to “unreasonable” delays for identity theft victims and returns flagged for possible identity theft, according to the report. During fiscal 2023, the IRS reassigned 572 workers to focus on telephone service.
The agency’s Identity Theft Victim Assistance program had 294,138 individual case receipts during fiscal 2023, up from 92,631 in 2019. Resolution times have skyrocketed to 556 days, which far exceeds the agency’s 120-day goal.
“It’s too early to tell what the new tax filing season will bring, but with a record number of data breaches reported in 2023 flooding identity markets with more personal information, it’s likely we’ll see more attempts to impersonate tax filers this year,” said James Lee, chief operating officer of the Identity Theft Resource Center.

“The Taxpayer Advocate raises a number of very important areas that we are looking at to make improvements under our strategic operating plan with Inflation Reduction Act funding,” IRS Commissioner Danny Werfel said in a statement. 
“Many of these issues identified in her report ultimately depend on adequate IRS resources,” he said. “This is another reason why the Inflation Reduction Act funding and our annual appropriations are so critical to making transformational changes to the IRS to help taxpayers and the nation.” 
The comments come as Congress faces a looming government shutdown deadline, with negotiations for possible IRS funding cuts.

Tax identity theft often affects lower earners

With many Americans relying on tax refunds, these delays can create financial hardship, particularly for lower earners claiming the earned income tax credit. Some 69% of taxpayers with resolved identity theft cases had adjusted gross incomes at or below 250% of the federal poverty level, IRS data shows.
“The IRS should do everything possible to timely assist these victims and provide them with the peace of mind that the IRS is looking out for their best interests and protecting their rights,” Collins wrote.

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Consumer spending has remained remarkably resilient, but that’s unlikely to continue, says Jack Kleinhenz, chief economist at the National Retail Federation.
Recent reports already show signs of strain.

Consumer spending remained remarkably resilient throughout 2023, even in the face of prolonged inflation and high interest rates.
But that’s unlikely to continue, according to Jack Kleinhenz, chief economist at the National Retail Federation.

“A year ago, many commentators were skeptical and calling for a recession, but the recession never came. With each passing month, consumers kept spending despite inflation and higher borrowing costs.””Nonetheless, those tailwinds are not necessarily sustainable,” Kleinhenz said in the January issue of NRF’s Monthly Economic Review, released Tuesday.
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Recent reports already show signs of strain.
In the last year, credit card debt spiked to a record high, surpassing $1.08 trillion, according to the latest quarterly report from the Federal Reserve Bank of New York.
Now, more cardholders are carrying debt from month to month and fewer are able to pay off their balances in full.

“We are still largely a paycheck-to-paycheck nation,” said Mark Hamrick, senior economic analyst at Bankrate.

We are still largely a paycheck-to-paycheck nation.

Mark Hamrick
senior economic analyst at Bankrate

So far, consumers have been sustained by very low unemployment. December’s jobs report closed out 2023 with another solid hiring gain while the unemployment rate held at 3.7%. Still, economists surveyed by Bankrate expect much slower payrolls growth in the months ahead with the jobless rate edging above the 4% level.
“The labor market looks set to cool further this year, which will impact consumer expectations for employment and wage growth, and, in turn, affect spending decisions,” Kleinhenz said. “Spending is elevated relative to current income, and maintaining the recent pace of growth will be increasingly difficult.”
What the Federal Reserve will do with interest rates is key to determining borrowing costs and credit conditions going forward, Kleinhenz added. The central bank has already indicated as many as three cuts coming this year. However, even then, credit card APRs aren’t likely to improve much. 
“Amid all the optimism about what the Federal Reserve might do this year, the high cost of debt is with us for the foreseeable future,” Hamrick said. More

Representations of cryptocurrency Bitcoin are placed on a PC motherboard in this illustration taken June 16, 2023. 
Dado Ruvic | Reuters

Crypto investors are waiting for the Securities and Exchange Commission to approve a raft of spot bitcoin applications, likely Wednesday
With a spot bitcoin ETF now looking very real, attention is turning to the details of how it will trade, how much it will cost, how much of the runup in bitcoin is due to demand that has been pulled forward, and premium or discount valuations.
Fees are competitive and will get more so

With nearly a dozen ETFs competing for attention, bitcoin buyers will be very price sensitive, and issuers are already engaged in a modest price war. For example, Cathie Wood’s ARK Invest, which is partnering with 21Shares to launch a bitcoin ETF, initially announced a fee of 0.8% but on Monday announced no fee for the first six months.
Other issuers are also steeply discounting prices, with several (Bitwise, ARK, Invesco) offering 0% fee for the first six months, while Grayscale is charging 1.5%.
Spot bitcoin ETF feesBitwise (GBTC) 0.0% (after first six months: 0.24%)ARK Invest/21Shares (ARKB): 0.0% (after first six months: 0.25%)Invesco Galaxy Bitcoin ETF (BTCO) 0.0% (after first six months: 0.59%)iShares Bitcoin Trust (IBIT) 0.20% (after first 12 months: 0.30%)VanEck Bitcoin Trust (HODL) 0.25%Franklin Templeton Digital Holdings Trust 0.29%Fidelity Wise Origin Bitcoin Trust (FBTC) 0.39%WisdomTree Bitcoin Trust (BTCW) 0.50%Valkyrie Bitcoin Fund (BTF) 0.80%Grayscale Bitcoin Trust (GBTC) 1.50%
Invesco’s Galaxy Bitcoin ETF has set its expense ratio at 0.0% for the initial six months and the first $5 billion in assets, and goes to 0.59% after.
How will a spot bitcoin trade relative to bitcoin and bitcoin futures?
One of the main questions is how well a spot bitcoin ETF will track bitcoin and bitcoin futures.

Simeon Hyman, ProShares’ global investment strategist who manages the largest bitcoin futures ETF, the ProShares Bitcoin Strategy ETF (BITO) that launched in October 2021, noted that bitcoin futures ETFs have tracked bitcoin “fairly well.” But he also told me, “The spot market for bitcoin is still not mature. The futures market is regulated and mature. We’ll have to wait and see how well they track against each other.”
Another issue is whether the bitcoin ETFs will trade at a premium or discount to their net asset value. In this case, the NAV is the value of the bitcoin owned by the ETF. Some are concerned that the creation and redemption process that was agreed upon to create spot bitcoin ETFs could result in a bitcoin ETF trading at a premium to its NAV.

“Some of these ETFs will trade at a premium, and then as investors start to understand the nuances, that’s when we will filter out the nuances and the small points,” Reggie Brown, GTS co-Global Head of ETF Trading & Sales, told Bloomberg.
Most market participants believe that any premiums will be small.
Som Seif runs the Purpose Bitcoin ETF, the first bitcoin ETF to launch in Canada in 2021.
“Our product trades extremely efficiently, with very tight spreads,” Seif told me. “You should see no impact on trading efficiency. There will be a breadth of players, and the underlying asset is very liquid.”
Matt Hougan, CIO of Bitwise Asset Management, one of the applicants for a bitcoin ETF, agreed: “The underlying market is very liquid,” he told me. “We have been in the market buying and selling bitcoin for years. The main issue are, who gets the liquidity, and who wins on expenses.”
How much money will these ETFs attract?
It’s not clear how much new money will be dragged in once a spot bitcoin ETF trades.
However, two ETF-related events have helped propel interest in bitcoin in the last two years:
1) The beginning in trading of bitcoin futures ETFs (BITO), starting in October 2021, which helped move bitcoin from almost $10,000 in October of that year to over $40,000 by January 2022. The largest bitcoin futures ETF, ProShares bitcoin Strategy ETF (BITO), recently passed $2 billion in assets under management, according to ProShares.
2) Blackrock’s application for a bitcoin ETF on June 16, 2023, helped moved bitcoin from roughly $25,000 to $30,000 in a matter of days.
Brown estimated that the combined ETFs could have fairly significant inflows. “Thirty days out, it could be $2 billion-$3 billion,” he told Bloomberg, estimating it could attract $10-$20 billion in new assets this year.
Still, considering the current market capitalization of bitcoin is near $900 billion, that is not huge inflows. The Canadian spot bitcoin ETF, the Purpose Bitcoin ETF, has about $400 million in assets after over two years.
What’s next?
The next issue, Hougan says, is whether the big institutions and financial advisors will allow their investors to trade bitcoin on their platforms.
“Just because a bitcoin ETF has been launched, it doesn’t mean JP Morgan will get in,” Hougan said.
After that, Hougan said the next big events will be the bitcoin halving in April, followed by any interest rate cuts from the Federal Reserve.
“Higher interest rates are bad for non-yielding assets like bitcoin or gold,” he told me. “If you get 5% on cash, that’s tough competition.” More

Roughly a month after Shohei Ohtani’s $700 million Los Angeles Dodgers contract, California’s controller is asking Congress for restrictions on deferred income.
However, with split control of Congress, there’s unlikely to be a near-term change to the federal tax law, experts say.

Japanese baseball player Shohei Ohtani attends a press conference on his presentation after signing a 10-year deal with the Los Angeles Dodgers at Dodgers Stadium in Los Angeles, California, on Dec. 14, 2023.
Frederic J. Brown | AFP | Getty Images

Roughly a month after Shohei Ohtani signed a $700 million contract with Major League Baseball’s Los Angeles Dodgers, California’s controller is calling for “immediate and decisive action” from Congress to limit deferred income for higher earners.
The Japanese pitcher’s record-breaking deal defers $680 million for 10 years and has raised questions about future state taxability — especially if Ohtani eventually leaves California. For 2024, California’s top tax rate is 14.4%, which includes a 1.1% payroll levy.

“The current tax system allows for unlimited deferrals for those fortunate enough to be in the highest tax brackets, creating a significant imbalance in the tax structure,” California State Controller Malia Cohen said in a statement Monday referencing Ohtani’s contract. 
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“The absence of reasonable caps on deferral for the wealthiest individuals exacerbates income inequality and hinders the fair distribution of taxes,” she said. “I would urge Congress to take immediate and decisive action to rectify this imbalance.”
Deferring $68 million annually for 10 years could save Ohtani $98 million over the life of his contract, according to an estimate from the California Center for Jobs and the Economy. However, the estimate uses several assumptions, and the exact terms of Ohtani’s contract are unknown. 

While California’s controller calls for restrictions on deferred income, that may not be the source of the problem, according to Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.

“What’s really going on here is a federal law that was enacted in 1995 by a Republican Congress to prevent states from taxing pension income,” he said. “The problem with Ohtani is he can return to Japan and sidestep California taxes.”
The provision prevents states from taxing nonresident “retirement income,” which can include deferred compensation.

Deferred income hasn’t been a priority for Congress

While some Democrats have called for higher taxes on the wealthy, lawmakers have focused on areas such as so-called unrealized gains, or investment growth, rather than deferred income, said William McBride, vice president of federal tax policy at the Tax Foundation.  
“Deferred income runs throughout the tax code,” such as income from your 401(k) or executive compensation, he said.
If Congress enacted restrictions on deferred income, it would “put the state in a worse position in terms of its ability to collect revenue from these high earners and star athletes because they wouldn’t be there,” McBride said.

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The inflation rate has being declining gradually from its pandemic-era peak in June 2022.
Since the rate remains positive, the U.S. is experiencing disinflation. Prices are rising, but at a slower pace.
The U.S. has rarely experienced deflation, which is when the inflation rate is negative. Here, prices decline outright. Broad and sustained deflation is typically a bad outcome, economists say.

A customer visits a supermarket in San Mateo, California, on Dec. 12, 2023.
Li Jianguo | Xinhua News Agency | Getty Images

Inflation is retreating from its pandemic-era highs.
Economic jargon yields two similar terms — “deflation” and “disinflation” — that might describe this pullback.

So, which is the U.S. experiencing? In short: disinflation.

What is disinflation?

In an economy experiencing disinflation, prices are still rising. However, they’re growing at a slower pace than they had been.
The inflation rate is still positive but at a lower level.

The consumer price index, a key inflation measure that tracks average prices across a broad basket of consumer goods and services, increased 3.1% in November 2023 relative to a year earlier. That’s a significant decrease from the pandemic-era peak of 9.1% in June 2022.
“Disinflation is what we want to see right now,” said Sarah House, senior economist at Wells Fargo Economics. “It’s the more ideal outcome” relative to deflation, she said.

What is deflation?

Deflation, by contrast, is when average prices are falling outright. The inflation rate flips negative.
Some consumer categories, such as used vehicles and gasoline, have deflated over the past year, according to CPI data. Their prices have declined about 4% and 9%, respectively.
However, broad, sustained deflation in the U.S. would generally be a bad outcome, economists said.
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For one, if consumers expect prices to be cheaper in the future, they may hold off on buying goods and services. Reduced consumer demand may crimp economic growth and further weaken prices, creating a self-reinforcing downward spiral.
Deflation can also cause problems for people who borrow money, economists said. The asset they own — a car or a house, say — may be falling in value while debt payments stay the same. If a borrower’s income declines, they have less money to pay down debt.

The U.S. has rarely experienced deflation

The U.S. has experienced few deflationary episodes since the Great Depression, said Andrew Hunter, deputy chief U.S. economist at Capital Economics.  
“It’s something you tend to talk more about in textbooks than in practice,” Hunter said.
Historically, broad deflation has occurred during periods of “extreme economic weakness,” he said.
For example, the U.S. annual inflation rate flipped negative from March 2009 to October 2009 in the throes of the Great Recession. It nearly did so in May 2020 during the early days of the Covid-19 pandemic.

The U.S. has also seen deflation when oil prices have tumbled sharply, Hunter said. Energy prices drag down the aggregate inflation index.
That happened for several months in 2015, for example. Oil prices collapsed 70% from mid-2014 to early 2016, driven by growing oil supplies. That collapse was at the time one of the three biggest oil price declines since World War II, according to the World Bank.
Such cases of deflation — linked to falling energy prices — can be a positive for consumers due to falling prices at the gasoline pump, for example, Hunter said.

Consumers are unlikely to see lower price tags

The U.S. Federal Reserve targets a 2% annual inflation rate over the long term.
At this “benign” rate, inflation hardly occupies consumers’ or businesses’ brain power. They generally don’t think much about costs or pricing, or how income and revenue are keeping pace with expenses, House said.
The U.S. is on its way back to that target. The supply-and-demand factors that caused inflation to surge in the pandemic era have largely unwound, economists said.

However, the Fed’s target underscores a perhaps bitter reality for consumers: Consumer price tags are unlikely to deflate (i.e., decline) much if at all for many goods and services. Remember: Disinflation means a lower rate of price growth, not an outright price decline.
“Consumers have woken up to the reality that prices rarely go down in the aggregate,” House said.
Of course, incomes and wages have exceeded inflation in the pandemic era, meaning the average person’s buying power has actually increased despite rising prices.
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The U.S. Department of Education said student loan servicer Mohela, or the Missouri Higher Education Loan Authority, failed to send timely billing statements to 2.5 million borrowers.
Here’s what to know about the issues borrowers are facing as they try to contact their servicers and apply for relief.

Student loan borrowers report spending hours on hold trying to contact their loan servicers.
Laylabird | E+ | Getty Images

Borrowers have been plagued by problems since the restart of student loan payments in the fall.
The U.S. Department of Education said at the end of October that student loan servicer Mohela, or the Missouri Higher Education Loan Authority, failed to send timely billing statements to 2.5 million borrowers.

As a result of Mohela’s errors, more than 800,000 borrowers had become delinquent, the Education Department reported.
Then just last week, the department announced that three additional student loan servicers — Aidvantage, EdFinancial and Nelnet — “all failed to meet contractual obligations to send timely billing statements to a combined total of 758,000 borrowers for the first month of repayment.”
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The Consumer Financial Protection Bureau has found that borrowers are waiting more than an hour, on average, trying to reach their student loan servicers on the phone. Meanwhile, borrowers’ requests to change payment plans are often stuck pending for more than 30 days with no resolution.
“Servicers are overwhelmed and are failing to help struggling borrowers navigate the options that are available to them,” said Persis Yu, deputy executive director at the Student Borrower Protection Center.

In comments to CNBC after the Education Department’s January announcement, Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers, blamed the errors on a lack of resources and notice from the government.
“Time and effort spent by Federal Student Aid and the CFPB on their press strategy would be better put to use in trying to solve the actual problems by coordinating on advocating for more resources and executing better operational planning by the government,” Buchanan said.
Here’s what borrowers should know about the servicer problems.

You shouldn’t be on the hook for servicer errors

Borrowers affected by these servicer issues will be placed into an administrative forbearance until things are sorted out, the Education Department said. In the meantime, you shouldn’t owe any payments and will not face interest charges.
The months spent in administrative forbearance should still count for those borrowers working toward loan cancellation under an income-driven repayment plan or the public service loan forgiveness program.
If your servicer is not following those instructions, you can file a complaint with the Education Department’s feedback system at Studentaid.gov/feedback. Problems can also be reported to the Federal Student Aid’s Ombudsman, said higher education expert Mark Kantrowitz.

If you’re unable to reach your servicer on the phone, sending a message via the company’s website may work, Kantrowitz added.

On-ramp periods give borrowers breathing room anyway

In large part because the Biden administration anticipated that it would not be easy to get tens of millions of borrowers back into repayment after a three-year break, it has implemented a 12-month “on-ramp” period.
Through this September, borrowers should be protected from most of the usual repercussions of late or missed payments, including wage garnishments and negative reports to the credit bureaus.

The Education Department recently sent a letter to credit reporting and credit scoring companies reminding them that borrowers’ current activity is not necessarily indicative of an inability or unwillingness to make payments.
People should challenge any negative marks on their credit by contacting their loan servicer or the FSA Ombudsman, Kantrowitz said.
Has the restart of student loan payments negatively affected your credit? If you’re willing to talk about your experience for a story, please email me at annie.nova@nbcuni.com.Don’t miss these stories from CNBC PRO: More

Despite a rocky “soft launch,” more than 1 million students and families have filled out the new FAFSA, according to the Department of Education.
However, it is still unclear when schools will receive each applicant’s information, potentially delaying college award letters and the decision deadline this spring.

For many families, financial aid is crucial when it comes to affording college.
But students must first fill out the Free Application for Federal Student Aid to access any assistance, including student loans, work study and grants. And this year, a new FAFSA form has been plagued by problems.

“It does seem consistent with a process that was rushed at the end with inadequate testing,” higher education expert Mark Kantrowitz said. “They are building the plane while flying.”
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For starters, the new FAFSA just soft-launched on Dec. 30 after a monthslong delay. Typically, students have access to the coming academic year’s form on Oct. 1.
In the days since its launch, the 2024–25 form was only available for limited windows of time as the U.S. Department of Education worked to “resolve minor issues,” according to a department spokesperson.
Some of the issues have been specifically related to contributors to the form, such as parents, who are not U.S. citizens or permanent residents, according to Kantrowitz, in addition to other various glitches and a prolonged processing time.

1 million students submitted a 2024–25 FAFSA so far

Still, the site has been flooded with eager applicants who rely on college aid.
“Over 1 million students and families and counting have successfully filled out the ‘Better FAFSA,’ which is now available 24 hours a day, seven days a week,” U.S. Secretary of Education Miguel Cardona said in a statement.
In ordinary years, the FAFSA form is used by more than 17 million students and roughly 5,500 colleges and universities in all 50 states, according to the Department of Education.

Kantrowitz, who tested the system Jan. 2, said his submitted application “is still showing as not yet finished processing.”
“Six days later, it is still listed as ‘in review,'” he said. “Normally, the FAFSA would be processed within a few days,” he added.
Despite the lag, the Department of Education said there is “plenty of time to complete the FAFSA form.” Even if students successfully submit a completed 2024–25 form early this year, that information won’t be sent to schools until late January, the department said.

Students are ‘understandably frustrated’

Even by soft-launch standards, the rollout was challenging, according to Justin Draeger, president of the National Association of Student Financial Aid Administrators.
“Students, families, and financial aid administrators who have been waiting for this release for months are understandably frustrated,” Draeger said.
Further, it is still unclear when schools will receive each applicant’s FAFSA information, he added, which is necessary to begin building financial aid packages and to give students and families enough time to review and compare financial aid offers.
“The sooner the Department can deliver this information, the better,” Draeger said.
Because of the postponement, colleges might not get their financial aid award offers done until late March or early April, according to Kantrowitz.
“They’ll probably send out the offers of admissions out on time, but for families, they won’t know how much aid they are going to get,” he said. “They need to know whether they can afford the college.”

The FAFSA delay’s ‘domino effect’

That could potentially push back National College Decision Day on May 1, which is the deadline many schools set for admitted students to choose a school.
“The FAFSA rollout has been a mess and will be even more so if colleges have to push back their commitment deadlines beyond May 1,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York. “This will have a domino effect on wait list candidates as well.”
Still, Rick Castellano, a spokesperson for Sallie Mae, advises students and families not to get discouraged.
“Families shouldn’t use this setback, however, as a reason not to submit the form,” Castellano said.
“Completing the FAFSA can unlock scholarships, grants, state-based, and federal aid, and the last thing you want to do is leave free money on the table,” he said.
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Dating apps see the highest rate of activity from the beginning of January to Valentine’s Day, experts say.
“Dating Sunday,” the first Sunday in January, is referred to as “the busiest day for online dating,” said Sheldon Bachan, senior brand communications manager at Tinder.
While getting back into the dating scene can spur many emotions, one thing is certain: It can be expensive.

Janina Steinmetz | Digitalvision | Getty Images

January can set the stage for new beginnings, with many single people setting a resolution to look for love.
In fact, dating apps see the highest rate of activity at this time of year.

There are 11.4 million more messages sent globally from Jan. 1 to Feb. 14 — Valentine’s Day — compared with the rest of the year, according to global internal data from dating app Tinder, and 58.7 million more likes are sent during this period.
“Everyone is back from the holidays with fresh New Year’s resolutions whether to find love, make more connections, or to put themselves out there in the New Year,” said Blaine Anderson, a dating coach for men in Austin, Texas.
“Dating Sunday,” the first Sunday in January, is referred to as “the busiest day for online dating,” said Sheldon Bachan, senior brand communications manager at Tinder.
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Like many other New Year’s resolutions, getting back on dating apps often requires a financial commitment. Some 35% of Americans who have used a dating website or app have paid to do so at some point, according to a recent report by Pew Research Center.

The average paying dating app user spends about $19 a month, Morgan Stanley found last year. But some users pay much more. In 2023, Tinder released a $499 monthly subscription, and Hinge introduced a $600-a-month membership.

3 things to consider before paying for a dating app

If you’re hunting for love in the new year, here are three things to be mindful of before you pay for a dating app:
1. Ask yourself if you are ready. If you haven’t made any changes in your life, paying for an app may not help: You’re likely to get the same results that you had before, said Anderson. “Do you have a job that allows you to have more time to date? Do you have the financial means to take people on dates or subscribe to dating apps?… Are you mentally prepared to integrate your life with somebody else’s?” she said.
2. App costs add to the already high expense of dating: Make sure your budget is prepared to weather the cost of the app as well as the resulting dates. The average cost of a full dinner and a movie across major cities in the U.S. is $159, according to a 2023 analysis by MoneyGeek. A 2020 report by LendingTree shows that Americans spend nearly $700 on dates annually.

3. Paying for apps does not guarantee a match: While paying app subscriptions may seem to be an investment in your dating life, users must understand that “the most important thing for online dating is to have a standout profile,” said Anderson. Simply paying for apps won’t immediately change your prospects. Instead, edit your profile and get a second opinion from trusted peers or dating experts.
“It’s not your fault; you didn’t learn this in school,” said Anderson, “We’re not meant to think in 160 characters or a little box of text to describe ourselves.”
— CNBC reporter Annie Nova contributed reporting. More