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Tax News & Views Three at the Table Roundup

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By Joe Kristan, CPA

White House Makes Offer to Democrats of $916 Billion Covid-19 Relief Bill - Andrew Duehren and Kristina Peterson, Wall Street Journal ($):

The Trump administration made a $916 billion coronavirus relief offer to Democrats, opening yet another front in the multi-track effort to reach an agreement in talks that rank-and-file lawmakers have been leading in the final weeks of the year.

The proposal, announced in a brief statement by Treasury Secretary Steven Mnuchin, came after Democrats rejected an effort by Senate Majority Leader Mitch McConnell (R., Ky.) to narrow the scope of a coronavirus relief bill by excluding aid for hard-hit state and local governments prioritized by Democrats and liability protections sought by Republicans.

Three parties at the table, each of whom can kill a deal, each with an agenda. The article doesn't say whether the White House proposal includes deductibility of expenses giving rise to PPP forgiveness. The administration's position is that such expenses are not deductible under current law. Senate Republicans and House Democrats support the deduction.

White House Offers $916 Billion Stimulus Proposal, Cutting Jobless Benefits - Emily Cochrane, New York Times. "The plan does not include a proposed revival of $300 weekly enhanced unemployment benefits, though it would extend other federal unemployment programs set to expire in the coming weeks. Instead, it would include another, smaller round of direct payments to Americans, amounting to $600 per person."

 

Tis the Season of Giving: 5 Tips for Donating to Charities - Deb Nelson, Eide Bailly. "Not sure what a qualified charity is? Research their tax-exempt status by going to IRS.gov and using the Exempt Organizations Select Check tool to verify."

COVID-19 GoFundMe Campaigns Raise Tax Questions Along With Funds - Frederic Lee, Tax Notes. "GoFundMe campaigns stemming from COVID-19 are prolific across the crowdfunding platform, but limited guidance from the IRS about online fundraising has left some individuals unsure of the tax treatment of the money received."

Filing and Payment Relief Demanded by Lawmakers - Jad Chamseddine, Tax Notes. "The letter provides a list of actions demanded by the 52 lawmakers on the letter, such as the creation of a special first-time abatement option for taxpayers affected by the pandemic. Lawmakers also want to give IRS customer service representatives more leeway to grant reasonable cause and COVID-19 abatement requests, as well as the creation of a special phone line for taxpayers making coronavirus-related penalty relief requests."

AICPA and Six Other Tax Related Organization Send Additional Letter to IRS Outlining Need for Agency to Set Up Special COVID Related Penalty Relief - Ed Zollars, Current Federal Tax Developments. "The letter begins by describing the problems, and pointedly notes that the IRS, through botched notices, has contributed to the problems facing taxpayers and tax professionals..."

Survey Says Pandemic Tax Fallout Could Be Severe in 2021 - William Hoffman, Tax Notes. "Together, the surveys could point to an unusually difficult 2021 tax return filing season, as millions of workers face reduced or absent income to pay taxes on previously healthy paychecks, while businesses struggle to survive coronavirus restrictions until a vaccine can be distributed and the economy recovers."

 

Colorado Bill Temporarily Allows Deduction for Some Food, Drink Retailers - Tax Notes. "Colorado H.B. 20B-1004, signed into law in response to COVID-19, temporarily allows alcoholic beverage drinking places, restaurants, and other similar businesses to take a deduction from state net taxable sales in order to help retain revenue and prevent employee layoffs."

Transfer to Trust Triggers Reassessment, California Court Holds - Andrea Muse, Tax Notes ($). "The Court of Appeal, Second Appellate District, held December 7 in Prang v. Amen that while there is an exception to the reassessment for transfers that do not change the proportional ownership interests in real property of the transferor and transferee, it was not applicable in this case. That was because other entities besides the trust owned nonvoting stock in the corporation transferring the real property."

 

IRS warns people about a COVID-related text message scam - IRS:

People get a text message saying they have "received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment… Continue here to accept this payment …" The text includes a link to a phishing web address.

This fake link appears to come from a state agency or relief organization. It takes people to a fake website that looks like the IRS.gov Get My Payment website. If people visit the fake website and enter their personal and financial account information, the scammers collect it.

The IRS doesn't operate by text message. They don't send you surprise e-mails. If you aren't sure about whether the IRS is really contacting you, they almost surely aren't. Contact a tax pro before doing anything in response to anything you think might be from a tax agency.

 

Passing Fiduciary Liability from Generation to Generation - Keith Fogg, Procedurally Taxing. "The case of Estate of Kelley, 126 AFTR 2d 2020-5398 (D. N.J. 2020) does not break much new legal ground but presents a rare case of a two generation failure to pay tax liabilities before distributing estate assets.  You could say it is a case of like father like daughter."

Bipartisan Tax Opportunities Under Biden Slim, But Not None - Jonathan Curry, Tax Notes ($). "The panelists were mostly skeptical that Biden’s more ambitious campaign proposals would come to fruition."

Bigger Social Security benefits bump could end up in year-end legislation - Kay Bell, Don't Mess With Taxes.  "Those crucial laws are the figurative tree, with all the sundry laws serving as those odds-and-ends ornaments that are always at the bottom of the storage box. One such bauble that's getting some attention right now is a proposal to increase next year's cost of living (COLA) bump for Social Security beneficiaries."

New York Lawmaker Floats a Scrooge Tax on Online Shopping - Jared Walczak, Tax Policy Blog. "Just in time for the holidays, one lawmaker wants to tax New York City residents $3 for every package they order online, excluding food and medicine. The legislature wouldn’t be able to take up the idea in time to turn it into a Scrooge Tax on gifts mailed to friends and family this holiday season, but there’s still something humbug about the whole idea. It’s a tax on every New York City resident who would prefer not to spend too much time in crowded stores during a pandemic and who benefits from the low prices and convenience offered by many online retailers. It’s a tax that hits Jacob Marley far worse than Ebenezer Scrooge."

 

Florida man sentenced for unlawfully downloading tax return transcripts from IRS - Department of Justice:

Ludrick Joseph, of Miami, Florida, was sentenced today to 60 months of incarceration for downloading taxpayer transcripts by unlawfully accessing Internal Revenue Service (IRS) computers, U.S. Attorney Bill Powell announced...

The investigation further revealed that Joseph unlawfully possessed approximately 2,145 credit card numbers and 3,875 unique social security numbers.  

Don't make it easy for ID thieves. Never send confidential information, like your social security number, via text messages or unencrypted emails. Don't send tax documents as unencrypted attachments to e-mails. 

 

The Mother of all Demos. On this day in 1968, "Douglas Engelbart gave what became known as 'The Mother of All Demos', publicly debuting the computer mousehypertext, and the bit-mapped graphical user interface using the oN-Line System (NLS)." - Wikipedia. More here.

 

It's a boy! Co-blogger Dan McNeil reports: "James Ryan was born yesterday afternoon at 1:41. He weighed 6 pounds 15 ounces and was 19 ¾ inches long. Everyone here is doing well and we should be able to leave later today."

New McNeil


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This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.