Tax News & Views Chocolate Mint Day Roundup

On Capitol Hill

Ways and Means eyeing limits to corporate tax deductions - Benjamin Guggenheim, Politico:

The House Ways and Means Committee is looking at limiting corporate state and local tax deductions as one way to offset the costs of a large party-line tax bill, according to two people familiar with the discussions.

The panel, which oversees all tax policy, is considering the limit among other potential offsets for the bill, according to the people, who were granted anonymity to share private deliberations. Companies currently can deduct an unlimited amount of state income, property and sales taxes from their federal tax bill.

Here’s What to Know About Congressional Republicans’ Budget Plans - Catie Edmondson, New York Times:

Republicans in Congress have been consumed for weeks with advancing a budget blueprint to power their push to enact Mr. Trump’s sweeping tax and immigration agenda. Approval of such a plan is a crucial first step if Republicans want to avail themselves of a process called budget reconciliation, which allows legislation that affects government revenues to pass the Senate on a simple majority vote.

Senate to Vote on Budget Resolution, Taking Lead Ahead of House - Cady Stanton, Tax Notes ($):

Should the Senate adopt the budget resolution — which leaves addressing the expiring provisions of the Tax Cuts and Jobs Act to a second bill later this year — Republicans would still need to square it with their House counterparts, who have begun their own process on a budget resolution that covers similar ground in addition to tax extensions. The House Budget Committee advanced its own budget plan February 13 that would assign $4.5 trillion to taxwriters with the intent of bringing it to the House floor when the chamber returns the week of February 24.

The big year ahead in tax - Laura Weiss, Punchbowl News:

Senate Republicans are forging ahead with a plan for border security, defense and energy focused bill. That would put a tax bill on pause until later in the year as part of a second reconciliation package. That could easily slip until December.

But House Republicans are adamant about passing a single package out of anxiety that with a razor-thin majority they have to pull all Trump's priorities in one package to secure the needed votes.

IRS

IRS will lay off thousands of probationary workers in the middle of tax season - Fatima Hussein, AP News:

The IRS will lay off thousands of probationary workers in the middle of tax season, according to two sources familiar with the agency’s plans, and cuts could happen as soon as next week. This comes as the Trump administration intensified sweeping efforts to shrink the size of the federal workforce, by ordering agencies to lay off nearly all probationary employees who had not yet gained civil service protection. It’s unclear how many IRS workers will be affected.

IRS Data Privacy And Tax Season Staffing Concerns - Renu Zaresky, Tax Policy Center:

Democratic Senators Ron Wyden and Elizabeth Warren are raising red flags over the potential access of Elon Musk’s Department of Government Efficiency (DOGE) to IRS taxpayer data. The senators cite media reports that the White House and DOGE are pressuring the IRS to approve a memorandum of understanding to grant Musk’s software engineers access to sensitive taxpayer information. Critics worry that such access could violate legal protections and undermine taxpayer privacy and administration.

A Look at the Hegseth IRS Notice - Joe Kristan, Eide Bailly:

The image shared by Secretary Hegseth doesn't include the explanation of the $33,558.16 proposed tax adjustment. There are a number of possible causes for the adjustment. For example, the motor vehicle credit is limited to $7.500, and it is disallowed for high incomes. A solar credit could have been submitted missing information.

Taxpayer Advocates, Unions Sue to Block DOGE Access to IRS Records - Tax Analysts, Tax Notes. "In a U.S. district court, a taxpayer advocacy group, a federal employee union, and others filed suit against the IRS and the Department of Government Efficiency (DOGE), seeking to enjoin DOGE's access to tax return information held by the IRS."

Tax Policy

Tariffs Can Mess With Tax Reform — It’s Happened Before - Joseph Thorndike, Forbes:

Nineteenth-century tariff debates can seem distant (and dull). But they help explain some of the puzzling politics that surround modern trade policies. Nowadays, the economic case against tariffs seems compelling, especially since it tends to bridge the partisan divide.

But popular opinion on protectionism is far less united. Divisions among the voting public reflect the same tensions that shaped 19th century fiscal policy, including the arrival of the income tax.

In the courts

Google to pay $340 million to settle Italian tax case - Emilio Parodi, Sara Rossi, Keith Weir, and David Goodman - Reuters:

Milan prosecutors plan to drop a case brought against the European division of Google after the company agreed to pay 326 million euros ($340 million) to settle a tax claim, they said on Wednesday. The agreement covers the period between 2015 and 2019 and the covers sanctions, penalties and interest, prosecutors said in a statement.

Final Remaining Injunction Against Enforcement of the BOI Reporting Requirement Stayed - Ed Zollars, Current Federal Tax Developments:

Judge Jeremy Kernodle of the US District Court for the Eastern District of Texas has issued a stay of the injunction against enforcement of the Beneficial Ownership Reports required by the Corporate Transparency Act he had previously issued in the case of Smith v. Treasury. He indicates the stay is being issued in light of the Supreme Court’s order in McHenry v. Texas Top Cop Shop, Inc.

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