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Rum, Tuna Lobbies Aim for Expiring Perks in Lame-Duck Package - Samantha Handler, Bloomberg ($):
Lobbyists for the racehorse, rum manufacturing, and tuna canning industries are gearing up their efforts to get temporary tax benefits extended, but their fate hinges on negotiations over year-end legislation.
The temporary benefits, known as extenders, are often packaged with must-pass legislation to move through both chambers, such as an omnibus appropriations package. There are 28 that have already expired or will expire in 2022, according to the Congressional Research Service.
Reporting on the odd tax extender and questioning why it should be extended has become an annual tradition - much like Thanksgiving and the holidays. However, unlike Turkey Tom and Old Saint Nick - who steadfastly show up every year - it is not clear if a year-end tax bill will make an appearance in the current Congress. The reason for that is here.
The crux of the argument:
Congress Begins Its Year-End Push Gripped by Midterms Hangover – Erik Wasson, Laura Litvan and Billy House, Bloomberg ($):
Businesses are lobbying hard for Congress to pass a package of tax breaks worth about $100 billion before the end of the year.
Republicans want tax breaks for private equity, manufacturers and businesses. In exchange, many Democrats want to expand the child tax credit along the lines of the maximum $3,600 per child credit from the now-expired 2021 stimulus bill.
The business breaks at issue are: the deduction for research and development costs, a more generous deduction for interest expense write-offs and a tax break known as 'bonus depreciation' that allows businesses to write off their equipment purchases in a single year.
Retirement, R&D Tax Breaks Top Congress' Year-End Wishlist – Asha Glover, Law360 Tax Authority ($):
Lawmakers could come to an agreement on bipartisan retirement legislation, dubbed Secure 2.0, before the legislative session ends, House Ways and Means Committee ranking minority member Kevin Brady, R-Texas, told reporters Wednesday.
‘I feel comfortable where we're at on Secure 2.0; I don't see anything in there that can't be resolved,’ Brady said. ‘Frankly, whether it goes as part of a package or standalone … I'm hopeful nothing deters us from finishing Secure 2.0.’
Pelosi Calls for Debt-Ceiling Vote During Lame-Duck Session - Tony Czuczka, Bloomberg ($):
House Speaker Nancy Pelosi signaled that Democrats will seek to extend the federal debt ceiling during the lame-duck session of Congress, avoiding a potential fight with Republicans that she said could threaten the US’s credit rating.
Even with party control of the House undecided on Sunday after the Nov. 8 midterm elections, Pelosi cited Republican threats to use the debt-limit extension “to cut” Medicare and Social Security.
‘We’ll see what they contend that they want to do,’ Pelosi said on ABC’s ‘This Week.’ ‘But our best shot, I think, is to do it now.’
For lawmakers to raise the debt ceiling they will likely need to do it under budget reconciliation rules, which would allow Democrats to raise the ceiling with only their support. Reconciliation is a budget process that is chock-full of procedural hurdles that can be time consuming. Doing it in a lame duck session will be a heavy lift.
Lack of GOP Wave Dims Section 199A Permanence Chances, Group Says – Doug Sword, Tax Notes ($):
The opportunity for the 118th Congress to be a launching pad for making the 20 percent passthrough deduction permanent dwindled after Republicans’ unexpectedly weak showing in the November 8 election, according to a backer of the section 199A provision.
Making the provision permanent was always a long shot because of its cost, no matter who controls Congress. The odds that Democrats support an extension is iffy if history is any guide. President Obama and a Democratically-controlled Congress in 2010 extended the Bush tax cuts – and many of them ran for office opposing them. Could history repeat itself?
National Taxpayer Advocate to IRS: Keep Your Eye on the Backlog – Lauren Loricchio, Tax Notes ($):
The IRS should boost telephone customer service levels for the upcoming filing season, but not at the expense of increasing the existing paper backlog, according to National Taxpayer Advocate Erin Collins.
Collins said in a November 10 blog post that while the IRS has said it will aim for the Taxpayer Advocate Service’s recommendation of providing an 85 percent level of service for answering phone calls for the 2023 filing season, she is ‘concerned about the collateral effects of the potential sacrifices the IRS may have to make to achieve that goal.’
Trump Wanted I.R.S. Investigations of Foes, Top Aide Says – Michael Schmidt, New York Times ($). “While in office, President Donald J. Trump repeatedly told John F. Kelly, his second White House chief of staff, that he wanted a number of his perceived political enemies to be investigated by the Internal Revenue Service, Mr. Kelly said.”
NY Expects ‘Super-Large’ Estate-Tax Payments, Cutting Budget Gap - Martin Braun, Bloomberg ($):
New York’s tax collections are surging well ahead of estimates, thanks in part to some big inheritances.
Four ‘super-large’ estate-tax payments are poised to push such collections $310 million over initial estimates during the current fiscal year, the Division of Budget said in a mid-year budget update.
Pa., Other States, Urge Judge's Support In MoneyGram Suit – Maria Koklanaris, Law360 Tax Authority ($). “States battling Delaware in the U.S. Supreme Court over claim to abandoned MoneyGram checks urged a court-appointed special master to maintain his original findings that federal law governs the checks and they belong to the challenging states.”
Voters Approve Tens of Billions of Dollars in Muni Projects – Heather Gillers, Wall Street Journal ($):
U.S. voters said yes to tens of billions of dollars for road-paving, school-building and other local projects last Tuesday, promising a new wave of bonds for eager investors.
The voters approved $57 billion out of the $63 billion in ballot measures for which results are available, according to data from S&P Global Market Intelligence. If that 90% approval rate holds steady, the total amount of new municipal debt authorized Tuesday will come to about $90 billion, the most from any election day in the data, which goes back to 2012.
SD Tax Exemption For Food Would Bar Local Levies, AG Says – Sanjay Talwani, Law360 Tax Authority ($). “A pair of proposed ballot measures to exempt food and drink from South Dakota's sales tax would also prevent municipalities from taxing those items, the state attorney general said in a final explanation of the measures.”
How long can the book last? – Bernie Becker, Politico Weekly Tax:
The new minimum tax might not work as well as Democrats hope or intend — it has exemptions for tax breaks for research and development, low-income housing and other items that experts say could allow brand-name corporations to still not pay a 15 percent effective rate.
But even if that happens, don’t expect Democrats to tolerate efforts from the business lobby and Republicans to roll back the new minimum tax.
From the 'I'm working from home, just not my home' file:
Employees Lie to Their Bosses So They Can Work From Anywhere - Alice Kantor, Bloomberg ($):
John spent the winter of 2020 shoveling snow off his Philadelphia front porch. Or at least that’s what he told his boss he was doing.
The tech consultant was actually traveling the world, going to Lebanon, Dubai, Vietnam, Canada and Australia. He kept doing it even when he started a new job last year with an employer who believes he lives and works in Houston.
John (not his real name) uses a VPN to disguise where he lives, works US hours, uses virtual Zoom backgrounds and watches the Houston weather so he can drop cues about his supposed location. To keep up the facade, the 30-year-old flew to Houston in May to pick up a laptop his new company sent to the home address he gave them — actually a friend’s house — before heading back to Dubai.
Further down the article:
Working abroad comes with a raft of tax and immigration issues, some of which can affect companies’ bottom lines…
It’s National Family PJ Day! During the pandemic everyday was national PJ day. Also, while walking to work it is not unusual to see someone wearing PJ bottoms as they head to the office.