The I.R.S. still has 35 million tax returns to get through, delaying refunds.
Three times more federal returns than last year were waiting to be processed at the close of the filing season in mid-May.
The Internal Revenue Service building in Washington. A backlog at the I.R.S. means tax refunds for many Americans will be delayed.Credit…Susan Walsh/Associated Press
Millions of tax returns are still awaiting processing by the Internal Revenue Service, which has faced a far bigger backlog than in years past.
That means any refunds due for those Americans have also been delayed. About 70 percent of the individual returns processed so far have been due refunds, with an average size of $2,827.
More than 35 million 2020 federal returns were waiting to be processed at the close of the filing season in mid-May — more than three times as many backlogged returns than at the end of last year’s filing season, according to a report released Wednesday from an independent advocacy group within the Internal Revenue Service.
“For taxpayers who can afford to wait, the best advice is to be patient and give the I.R.S. time to work through its processing backlog,” Erin M. Collins, the national taxpayer advocate, said in her midyear report to Congress. “But particularly for low-income taxpayers and small businesses operating on the margin, refund delays can impose significant financial hardships.”
The I.R.S. said in a statement that it had been processing returns continually for current and prior years, including amended returns filed by taxpayers. As of June 18, it had fully processed almost seven million individual tax returns since the end of tax season, and more than 15 million of the backlogged returns are in some stage of processing, the agency said.
The report — which also included recommendations for the I.R.S. and a series of objectives that the advocate plans to pursue in the upcoming year — said the backlog resulted largely from a pandemic-related evacuation order that restricted employee access to I.R.S. facilities. In 2019, before the pandemic started, the agency had a backlog of 7.4 million returns at the close of the filing season. Last year, that number swelled to 10.7 million.
The I.R.S. has not only had to perform its traditional duties, it has also had to digest tax legislation that was enacted in the 2021 filing season, the report said. Then, there was the third round of stimulus payments that the agency started sending in mid-March. Over the past 15 months, the agency has processed 475 million stimulus payments worth $807 billion.
The I.R.S. processed 136 million individual income tax returns by the end of the filing season, and issued 96 million refunds totaling about $270 billion. The 35.3 million returns that were still outstanding at the end of the filing season included individuals and businesses. The taxpayer advocate said those returns required some sort of manual assistance, meaning an employee needed to get involved before they could be pushed to the next stage of the processing pipeline.
A worker at the Saudi Aramco oil facility in Abqaiq, Saudi Arabia. Oil prices have risen about 85 percent since late last year, as demand has slowly revived.Credit…Maxim Shemetov/Reuters
OPEC, Russia and their allies will meet by videoconference Thursday to consider whether the strength and durability of the recovery of oil demand warrants an increase in oil output.
For more than a year, this group of producers, known as OPEC Plus, has kept a tight grip on oil production, helping to lift prices by around 85 percent since November to about $75 a barrel for Brent crude, the international benchmark, and $74 a barrel for West Texas Intermediate, the U.S. standard.
Some of the group’s members, including Russia and the United Arab Emirates, are expected to lean toward increasing production at a time when oil consumption is rising as economies recover from the pandemic.
Some oil officials also worry that keeping tight controls on production can be counterproductive because relatively high prices — some analysts are projecting they could eventually reach $100 a barrel — will encourage competitors like shale oil drillers in the United States to increase output, cutting into the market share of the OPEC Plus countries.
On the other hand, Saudi Arabia, the world’s largest oil exporter, is known to favor caution. If the economic recovery stumbles because of new variants of the coronavirus, for instance, an oversupply of oil could force prices to drop.
Oil officials will also be keeping in mind the potential for an output increase later this year and in 2022 from Iran, an OPEC member. Tehran is engaged in indirect talks with the United States on resuming the nuclear deal that President Donald J. Trump abandoned. If successful, these negotiations could lead to a lifting of the U.S. sanctions that have crimped Tehran’s oil sales.
On Wednesday, Mohammad Alfares, the oil minister of Kuwait, a close ally of the Saudis, said that OPEC Plus was “cautious with regard to the strategy of raising production amid the challenges of the oil markets.”
The Saudis have previously agreed to a gradual increase of about two million barrels a day — about 2 percent of world supplies — from May through July.
Helima Croft, an analyst at RBC Capital Markets, an investment bank, said in a recent note to clients that OPEC Plus may approve an increase in production of 500,000 barrels a day to up to one million barrels a day, beginning in August.
Ms. Croft said that such “a modest turn of the taps should be palatable to all the parties involved.” And OPEC Plus can always backtrack rapidly through the monthly meeting schedule it has adopted during the pandemic.
A Krispy Kreme store in Times Square. The company raised $500 million in an initial public offering this week.Credit…Amr Alfiky/The New York Times
On any normal week, the trading debuts of Krispy Kreme or Didi Chuxing, the Chinese ride-hailing giant, would be the biggest news in initial public offerings. But they were just two of 18 I.P.O.s that hit the markets this week, making it the busiest since December 2004.
It’s a sign of how the traditional way of going public has roared back after being briefly supplanted by the shell companies known as special purpose acquisition companies, or SPACs. Overall, 213 I.P.O.s raised $70 billion in the first half of the year, which is above the full-year average for the past 10 years, according to Renaissance Capital. June was the busiest month for listings since August 2000.
“In addition to rising returns and a massive backlog of unicorns and others, companies are getting out ahead of the July 4 holiday,” said Matt Kennedy, a senior I.P.O. market strategist at Renaissance Capital, which manages I.P.O.-focused exchange traded funds.
Didi’s shares closed on Wednesday above their offer price, valuing the tech company at $69 billion. “It’s a successful I.P.O. coming out of the gates,” said Daniel Ives of Wedbush Securities, but the company still has a lot to prove to investors worried about tension between the United States and China.
Clear Secure, the travel security company, also ended the day up in price. “We’re very positive on travel,” its chief executive, Caryn Seidman-Becker, said.
On Wednesday evening, the plus-size apparel retailer Torrid topped its expectations, raising $231 million in an offering. The retailer, backed by the private equity firm Sycamore Partners, saw sales dip slightly during the pandemic — to $973 million from a little over $1 billion — but used the setback as a chance to accelerate its e-commerce transformation, like investing in curbside pickup.
“We did use all that disruption to learn,” said the company’s chief executive, Liz Munoz. “Our business had already been blown up into a million pieces — might as well get creative.”
But not all debuts this week fared equally well.
Krispy Kreme priced its offering well below expectations, raising $500 million, down from $640 million.
The company’s sales grew 17 percent to $1.1 billion its latest fiscal year, up from $959 million the year before. Losses, though, nearly doubled, to $60 million from $34 million as the company doubled down on attempts to buy out its franchisees. The company has pitched to investors growth from those efforts, alongside opportunity to expand further internationally.
“The big investment phase that we really did over the past five years is mostly behind us, — and we’re really now just going directly into how do we really drive this business forward,” said Michael Tatterfield, chief executive of Krispy Kreme.
JAB Holding, a European investment firm, acquired Krispy Kreme for roughly $1.35 billion in 2016, adding the doughnut seller to a portfolio of consumer brands that now includes the sandwich shop Panera and the coffee chain JDE Peets.
Initial claims for state jobless benefits fell last week, the Labor Department reported Thursday.
The weekly figure was about 359,000, down 38,000 from the previous week. New claims for Pandemic Unemployment Assistance, a federally funded program for jobless freelancers, gig workers and others who do not ordinarily qualify for state benefits, totaled 115,000, up 3,000 from the week before. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 364,000, a decrease of 51,000.)
A total of 26 states have announced plans to discontinue some or all federal pandemic unemployment benefits this month or next — including a $300 supplement to other benefits — even though they are funded through September. Officials in those states said the payments were keeping people from seeking work. But the online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average.
New state claims remain high by historical standards but are one-third the level recorded in early January. The benefit filings, something of a proxy for layoffs, have receded as businesses return to fuller operations, particularly in hard-hit industries like leisure and hospitality.
Roughly seven million fewer jobs exist now than before the pandemic. A fuller picture of the labor market will emerge on Friday, when the government will issue its report on June hiring.
— The New York Times
Ashwani Gupta, Nissan’s chief operating officer, in Sunderland on Thursday. He said the new investments would continue “our long tradition of supplying European customers and world markets from the U.K.”Credit…Phil Noble/Reuters
The Japanese carmaker Nissan announced plans on Thursday to build a battery factory near its plant in northeastern England, and to manufacture a new electric crossover S.U.V. there, bolstering the chances that Britain’s auto industry can survive Brexit and the transition to electric vehicles.
Envision AESC, a Chinese-owned company that already provides Nissan with batteries at the assembly plant in Sunderland, will invest 450 million pounds, or $620 million, in a new so-called gigafactory to supply electric cars made at the site. It is part of a partnership between the two companies that began when Nissan sold AESC to Envision in 2019.
Domestic battery production is crucial to the future of Britain’s auto industry. Under the terms of Britain’s exit from the European Union, cars made with imported batteries will be subject to punishing tariffs when exported to the continent.
The tariffs will take effect in 2027, only three years before Britain will begin banning the sale of new cars powered solely by gasoline or diesel. The Nissan factory in Sunderland exports 70 percent of its production to the European Union and could not survive without access to that market.
Nissan’s commitment to invest up to GBP423 million to build a new, as yet unnamed electric car in Sunderland also bodes well for the factory, Britain’s biggest auto plant. The factory currently produces the Qashqai subcompact crossover, the Juke compact S.U.V., and the electric Leaf.
“These new models will continue our long tradition of supplying European customers and world markets from the U.K.,” Ashwani Gupta, Nissan’s chief operating officer, said during an event at the factory.
Manufacturing the new vehicle will require 900 new jobs at the Sunderland factory, Nissan said, while the Envision AESC battery factory will create 750 jobs.
Overall, Nissan said the projects were a combined GBP1 billion investment in the plant. They are also receiving government support, though it was not immediately clear how much. The local government in Sunderland will spend GBP80 million on a microgrid to supply the factories with wind and solar energy.
Boris Johnson, the British prime minister, called the announcements “a pivotal moment in our electric vehicle revolution and securing its future for decades to come.”
After Britain voted to leave the European Union and ended frictionless trade, the future of its auto industry became uncertain just as manufacturers were reorganizing their production around electric vehicles. Honda is scheduled to shut down its factory in Swindon next month and the site has already been sold to a logistics company. The fate of a Vauxhall plant in the northwest of England depends on government support, Stellantis, Vauxhall’s parent company, said earlier this year.
Nissan’s future in Britain has been a continuous test of Brexit supporters’ claims that leaving the European Union wouldn’t cause businesses to flee. Since the Brexit referendum in 2016, Nissan’s investment commitments to Britain have wavered but have been met by hearty guarantees from the government to support expansion at the Sunderland plant, which opened in 1986.
Nissan opposed Brexit, warning that the uncertainty it would cause could discourage future investment. In 2019, the company scrapped plans to build a new conventionally powered S.U.V. in Sunderland and concentrated production of the vehicle in Japan. But government commitments to the company and the new trade agreement with the European Union have encouraged Nissan to expand operations at the plant, protecting jobs in a city that voted overwhelmingly in favor of Brexit.
The Society of Motor Manufacturers and Traders said this week that Britain needed to rapidly increase battery production and add at least 2.3 million charging points by 2030 if it wants to avoid the industry falling into “precipitous decline.”
Late last year, Mr. Johnson said the government would spend nearly GBP500 million over four years on battery production.
Lina Khan, the chair of the Federal Trade Commission, is one of the foremost critics of Big Tech.Credit…Pool photo by Graeme Jennings
Lina Khan, the new chair of the Federal Trade Commission, will unveil her first innovation at the agency on Thursday. She is opening monthly meetings to the public — and airing viewer comments — in a move intended to convey that there’s a new competition law enforcer in town and she’s on the side of the people, the DealBook newsletter reports.
“Symbolism is not unimportant,” said Bruce Hoffman, an antitrust partner at Cleary Gottlieb and former director of the F.T.C.’s competition bureau. Greater transparency is welcome, but since much of what commissioners discuss is based on confidential information, the meetings will necessarily involve limited insight.
Mr. Hoffman is particularly interested in one agenda item at the meeting, a vote to rescind a 2015 policy statement on enforcement principles for certain “edge” competition cases. It was approved during the Obama administration, Mr. Hoffman said, so that potential break is symbolic, too.
Ms. Khan is one of the foremost critics of Big Tech, and her academic work has reshaped policymakers’ thinking about competition law in the digital age. She represents the mood of a time when politicians on the left and right say tech giants have too much power and half of Americans say they should be more regulated.
However, Ms. Khan’s outspokenness raises issues for her as a regulator. On Wednesday, Amazon filed a 25-page motion seeking the chair’s recusal from all company matters based on her past pronouncements, just as the commission is reviewing its business practices and proposed acquisition of M.G.M. At the meeting, insiders predict resistance to Ms. Khan from the agency’s two Republican commissioners and questions about recusing herself from other Big Tech matters.
Then there is Facebook. A judge dismissed the F.T.C.’s monopoly case against the company this week, telling it to try again with more facts. Mr. Hoffman said this still gave the agency room to maneuver, and a more transparent F.T.C. will help the public see how complicated and nuanced the law — and commissioners — can be. “Not everything is a zero-sum battle,” he said.
Hertz benefited from high demand for used cars during the pandemic, when it sold off more than 200,000 vehicles.Credit…Cindy Ord/Getty Images
Hertz, an early victim of the pandemic, officially emerged from bankruptcy on Wednesday. Its return coincides with and was made possible in part by a red-hot market for rental cars.
It is a remarkable turnaround for a business that was bloated with debt and struggling to survive just 13 months ago. But a quick economic and travel rebound in recent months set off a bidding war to revive the company, which is more than a hundred years old. The winning group of investors, led by Knighthead Capital Management and Certares Management, provided the company with $5.9 billion in capital.
The resolution of its bankruptcy allows Hertz to shed more than $5 billion in debt, including all of the corporate debt of Hertz Europe. The company also lined up access to nearly $10 billion in loans, credit lines and other debt.
“It sets them up very well,” said Hamzah Mazari, an analyst at Jefferies, an investment bank. By reducing its debt load, Hertz can make much-needed investments like modernizing its technology and buying cars, he said.
Rental car businesses are doing very well right now. Travel is rebounding around the country, and people are eager to rent cars after spending more than a year at home. Searches for rental cars and their prices have nearly doubled over the past two weeks compared with the same period in 2019, according to Kayak.
In some cities, cars can rent for more than $300 a day. Rentals are especially expensive in parts of the country that individuals and families have been flocking to throughout the pandemic: beach and outdoor destinations. In Anchorage, a rental can cost about $330 per day, according to Kayak. In Bozeman, Mont., it can run about $315 a day.
The high prices are partly the result of a car shortage, driven by high demand for used cars and supply chain disruptions throughout the pandemic. On Wednesday, Ford said it would have to keep some production suspended into July because of a global shortage of computer chips.
The skyrocketing prices for used cars helped Hertz in another way.
When the company filed for bankruptcy in May 2020, used car prices were only just starting to rise. By August, prices were up nearly 20 percent, according to data from Manheim, which runs auctions for used cars and tracks that market. The timing worked out well Hertz, which sold more than 200,000 vehicles, mostly in the second half of 2020. Before it filed for bankruptcy, Hertz had a global fleet of about 650,000 vehicles.
“Instead of a problem, it was actually a source of strength for the rental car companies, including Hertz, last year, because as they sold vehicles they were actually making money on those transactions,” said Jonathan Smoke, chief economist for Cox Automotive, which owns Manheim.
Hertz’s stock, which trades in the less-restricted over-the-counter market, plummeted from more than $15 before the pandemic to less than $2 a share during the crisis. Individual investors, many of whom exchange ideas and trading strategies online, piled into the stock last spring, to the surprise of many analysts who feared the company’s shares could become worthless in bankruptcy. Some of those investors who held on to their shares now stand to make a tidy profit.
Hertz’s share price has risen in the past two months to nearly $9 as Hertz’s emergence from bankruptcy seemed increasingly likely. Starting Thursday, the company’s shares will trade under a new ticker symbol, HTZZ.
“Today marks a significant milestone in Hertz’s 103-year history,” Paul Stone, the company’s president and chief executive, said in a statement. “With a solid financial foundation, a leaner, more efficient operating model, and ample liquidity to invest in our business, Hertz has outstanding potential to drive long-term profitable growth.”
The University of North Carolina’s board of trustees voted on Wednesday to grant tenure to the Pulitzer Prize-winning journalist Nikole Hannah-Jones, ending a dispute that had stretched on for more than a month. Nine board members voted in favor of tenure for Ms. Hannah-Jones and four against. Ms. Hannah-Jones, a correspondent for The New York Times Magazine who earned a master’s degree from U.N.C. in 2003, had accepted a position as the Knight Chair in Race and Investigative Journalism at the university’s Hussman School of Journalism. The U.N.C. board had previously not held a vote on whether to give her tenure, despite recommendations from the Hussman School dean and faculty, as well as the university’s provost and chancellor.
A judge on Wednesday blocked a Florida law that would be the first in the nation to prohibit social media companies from barring political candidates. In granting a preliminary injunction, Judge Robert L. Hinkle of the United States District Court for the Northern District of Florida blocked “enforcement of the parts of the legislation that are pre-empted or violate the First Amendment” or are covered by other parts of federal law. The legislation, which was signed by Gov. Ron DeSantis in May, would fine companies like Facebook, YouTube and Twitter if they permanently barred candidates for office in the state.