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Key Takeaways
- Disaster tax relief up for floor vote.
- Lawmakers seek permanent free file.
- AARP joins TCJA fight.
- Seeking a new IRS.
- Court updates.
- Global wealth tax is a “no” in U.S.
- Taxes and Broadway.
- Did you get the memo?
Disaster Tax Relief Comes to the House Floor – Samantha Handler, Bloomberg ($):
The expected vote now comes to the House floor through a fast-track process, after 218 members signed on to the discharge petition to force a vote. It has notable backing from Ways and Means top Democrat Richard Neal (Mass.) and broad bipartisan support.
How the bill got to the House floor:
Capitol Hill Recap: Disaster Tax Relief Bill to Hit House Floor – Jay Heflin, Eide Bailly:
In short, a Discharge Petition is where a congress person sends a petition to fellow lawmakers and asks them to sign it. These petitions call for a House floor vote on a certain piece of legislation. If 218 House lawmakers sign the petition, the bill gets a floor vote.
What the bill does:
Legislative outlook: The bill should get a floor vote in the House. Passage is likely. Once it travels to the Senate, it could pass there as well. In other words, this bill could become law if President Biden signs it.
Don't expect the tax bill that includes R&D expensing and other business tax breaks to be added to this bill.
Lawmakers Ask IRS For Broader, Permanent Free E-File Plan – David van den Berg, Law360 Tax Authority ($):
The lawmakers want the program's capabilities to grow, including to support more income sources and integrate with more states, according to their letter obtained by Law360 on Monday. The program should also use taxpayer data the Internal Revenue Service already possesses to further streamline the filing process, the lawmakers said.
The letter is here ($).
AARP to get in on the 2025 tax tussle – Laura Weiss, Punchbowl News ($):
Enter the AARP.
The lobbying force for people 50 and over will be jumping into the mix with support for family caregivers at the top of its priority list. That could be a tricky ask for lawmakers, who will be juggling big political priorities and potentially trillions of dollars in tax cuts.
The 2025 fight about extending the individual tax cuts in the Tax Cuts and Jobs Act (TCJA) is already underway. Discussions started in earnest earlier this year – and will only grow in intensity as we approach 2025. Also, this tax fight will likely extend into 2026 if we wind up with a divided Congress after the 2024 elections. And 2026 is also an election year. This means the fate of the TCJA tax cuts could be determined by an election two cycles away.
IRS Updates
IRS is making headway on modernizing 1960s-era tax system, commissioner says – Natalie Alms, NextGov/FCW:
The IRS has been trying to modernize the system — an effort the agency’s watchdog has called “one of the most complex modernization programs in the federal government” — since at least 2009.
The tax agency is currently testing a new processing engine as part of a possible replacement, IRS Commissioner Danny Werfel said in a recent interview with Nextgov/FCW.
The IRS Has More to Say About Transferability and Elective Pay – Marie Sapirie, Tax Notes ($):
Court Side
Baker McKenzie Ends FOIA Suit Over IRS Partnership Audits – Ali Sullivan, Law360 Tax Authority ($):
Firm partner George M. Clarke, chair of Baker McKenzie's North American tax dispute resolution group, filed the notice of voluntary dismissal with prejudice Friday in D.C. federal court. The one-page filing did not detail Clarke's reasons for ending the suit, which was brought under the federal Freedom of Information Act.
Ex-IRS Agent, Five Others Sentenced In COVID Fraud Scheme – Phillip Bantz, Law360 Tax Authority ($). “A former Internal Revenue Service agent, his brother and four other defendants have pled guilty to participating in a scheme that netted more than $3 million in fraudulent COVID-19 pandemic relief loans.”
Domino's Franchisee Gets Year In Prison In $2.5M Tax Case – Anna Scott Farrell, Law360 Tax Authority ($):
U.S. District Judge Joshua D. Wolson sentenced [the defendant] to a year and one day in federal prison, the DOJ said. [The defendant] was also ordered to pay a $50,000 fine and serve one year of supervised release, the DOJ said.
Ninth Circuit Affirms Tax Court on Accounting Method Change – Tax Notes ($). “The Ninth Circuit affirmed a Tax Court decision in favor of a continuing care community after the IRS changed its accounting method, finding that the Tax Court properly concluded that the community’s accounting method for deferred entrance fees met the all-events test and clearly reflected income and the IRS could not impose a method to more clearly reflect income.”
California Estate Not on the Hook for Gift Taxes, Tax Court Says - Tristan Navera, Bloomberg ($):
The US Tax Court invalidated a $9 million underpayment and $1.8 million penalty the IRS had levied against the estate of Sally J. Anenberg.
International Zone
U.S. Opposes Global Tax on Billionaires, Yellen Says – Alexander Rifaat, Tax Notes ($):
A Treasury spokesperson confirmed to Tax Notes the comments made by Yellen in a May 20 article by The Wall Street Journal, in which she said the Biden administration won’t support a proposal introduced by Brazilian Finance Minister Fernando Haddad that calls for a 2 percent annual tax on the ultrawealthy.
Global Minimum Tax: 3 Key Priorities for U.S. Multinationals - Perry Hatch, CPA Practice Advisor:
The following are three key priorities when preparing for the global minimum tax:
1. Transforming tax data connectivity…
2. Adjust tax processes to accommodate country-by-country reporting…
3. Collaborate across functions…
US Companies Move Behind American Shield to Delay Global Tax - Lauren Vella and Caleb Harshberger, Bloomberg ($):
It’s unclear how many US companies are part of this trend, but practitioners tell Bloomberg Tax they have helped US companies move ownership of their foreign subsidiaries to the US, which has yet to sign up to the global minimum tax. The move triggers a one-year delay in compliance.
India's Top Court Says Accounting Body Can Limit Tax Audits – David Hansen, Law360 Tax Authority ($):
The Institute of Chartered Accountants of India is empowered by the Indian government to set up the terms and conditions under which India's accountants can perform their professional duties, the court said in a decisionFriday. At the same time, it said the regulation at issuewas selectively enforced and therefore quashed all ongoing disciplinary proceedings against violators that were brought before April 1.
From “The Great White Way” file
Does a Smash Hit Like ‘Lion King’ Deserve a $3 Million Tax Break? – Jay Root and Michael Paulson, New York Times:
Over the three years since the program was established, New York State has bestowed over $100 million on commercial Broadway productions.
As a former NYC actor who performed in Off-Broadway productions earning way less than the union minimum (even though I was a union member), I would hope that New York State considers doling some of that bread to shoestring productions that occur in Blackbox theaters all over NYC and hardly ever breakeven when it comes to the bottom line.
What Day Is It?
Did you get the memo? You should have. It’s National Memo Day!