Tax Update Blog

Tax News & Views COVID Relief and Bad Movie Roundup

July 22, 2020 | Blog

Payroll Tax Cut Omitted From Republican Priority List - Jad Chamseddine, Tax Notes ($):

Senate Majority Leader Mitch McConnellR-Ky., told reporters July 21 that opinions differ on providing a temporary payroll tax cut, but did not list it as a must-have item despite being urged to do so by President Trump. “We’re still in discussions with the administration on that,” McConnell said. 

McConnell was addressing the media after meeting with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows

The report said McConnell announced that the plan will include a second round of stimulus checks. "McConnell's announcement did not sit well with Sen. Rand PaulR-Ky., who called it 'insane' to disregard the debt and pay individuals who haven’t lost their jobs."

White House doubles down on payroll-tax cut opposed by GOP senators - Alexander Bolton, The Hill. "White House chief of staff Mark Meadows told reporters Tuesday that President Trump is committed to including a payroll-tax cut in the next coronavirus relief bill despite firm opposition from Senate Republicans."

Trump’s Push for Payroll Tax Cuts Aligns With the CARES Act - Benjamin Willis, Tax Notes Opinions Blog. "The same elected officials who are objecting to the inclusion of a payroll tax are likely the ones who voted to give large corporations — those with more than $25 million in gross receipts generally — added income tax relief through increased interest deductions to increase their liquidity."

 

Biden Would Fund Caregiving Plan by Cutting Like-Kind Exchanges - Alexis Gravely, Tax Notes ($). "The plan’s proposals include increasing access to affordable child care through tax credits, building safer child care facilities, and raising salaries and benefits for caregivers and early childhood educators."

Biden Unveils Child-Care Plan to Help Families Struggling in Pandemic - Ken Thomas, Wall Street Journal ($). "Mr. Biden’s plan would limit the ability to engage in what are known as like-kind exchanges, a cornerstone of the commercial real-estate industry...Mr. Biden also would roughly double the top capital-gains rate. Combined with limits on like-kind exchanges, that policy means commercial real-estate transactions that today yield no income taxes could instead be taxed immediately at a 39.6% rate."

 

It's time for post-filing tax record keeping - Kay Bell, Don't Mess With Taxes. "Any records that show the expenses for which you claim a tax deduction or credit need to be saved."

IRS Releases 2021 ACA Premium Tax Credit Percentages - Ed Zollars, Current Federal Tax Developments. "Under IRC §36B, if an individual is not offered an affordable health plan providing minimum value by his/her employer, a credit is available up to the difference between the cost of the second lowest cost Silver Plan available to the employee and the applicable percentage for the year of the individual’s household income."

Debunking 3 Myths About the Mortgage Interest Deduction - Taylor LaJoie, Tax Policy Blog. "Yet, by any measure, the deduction—either prior to TCJA or in its aftermath—does not result in more taxpayers becoming homeowners. Instead, it is among the largest tax expenditures in the code, serving as an indirect subsidy to wealthy taxpayers to finance purchasing a larger home."

How Would Paydown Affect The Reform Of Home Mortgage Interest Deduction? - Chenxi Li and Eric Toder, TaxVox. "Reforming the mortgage interest deduction (MID) could raise federal tax revenue and make the tax system more progressive. But some taxpayers, especially those with high incomes, are likely to mitigate any tax increase associated with the reform by selling some financial assets and paying down their mortgage debt. This practice would reduce federal revenues associated with the reform and also could make reforming the MID somewhat less progressive than it would be otherwise."

 

What someone should do if they missed the July 15 deadline to file and pay - IRS Tax Tip.

Anyone who didn't file and owes tax should file a return as soon as they can and pay as much as possible to reduce penalties and interest. Electronic filing options, including IRS Free File, are still available on IRS.gov through October 15, 2020 to prepare and file returns electronically.

Taxpayers should then review their payment options. The IRS has information for taxpayers who can't pay taxes they owe.

 

Offer-in-Compromise Mills Make IRS Dirty Dozen List - Freeman Law Tax Blog. Remember the radio ads promising "pennies on the dollar" settlements on tax debt? Shockingly, they were scams. The post quotes from the IRS "Dirty Dozen" release:

These scams are commonly called OIC “mills,” which cast a wide net for taxpayers, charge them pricey fees and churn out applications for a program they’re unlikely to qualify for.  Although the OIC program helps thousands of taxpayers each year reduce their tax debt, not everyone qualifies for an OIC.  In Fiscal Year 2019, there were 54,000 OICs submitted to the IRS.  The agency accepted 18,000 of them.

In other words, it has to not just be inconvenient to pay your taxes; it has to be pretty much impossible.

Related: Can I file bankruptcy to eliminate my tax debt?

 

Today in history. 1959 Ed Wood's cult classic "Plan 9 From Outer Space", called one of the worse films ever, premieres - Onthisday.com. "Even for its time, the special effects used in the movie were considered horrendous, and the movie also contained several technical mistakes (including the visibility of the boom microphone in one shot and an actor clearly reading from a script on his lap.) Critics and fans alike have savaged the movie's bad dialogue and plot. Bela Lugosi even appears in the movie despite the fact that his footage was shot for a different movie shortly before he passed away."


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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.