Biden Pushes Higher Taxes on U.S. Companies’ Foreign Profits in Pitch to Midwest Voters - Richard Rubin and Ken Thomas, Wall Street Journal ($):
The plan, which comes on top of corporate tax increases he had previously proposed, would reverse many of the changes in the 2017 tax law signed by President Trump. Mr. Biden would impose a new surtax on U.S. companies that make products overseas and sell back into the U.S. He would also raise the minimum taxes on U.S. companies’ foreign income and offer a 10% tax credit for certain investments in domestic production.
Also:
Steve Cortes, a Trump campaign adviser, told reporters that Mr. Biden was “largely mimicking what we’ve proposed for a second term,” saying the president would “both offer incentives for American companies to onshore from China and elsewhere,” while also issuing “penalties for companies who offshore.”
Link to Biden campaign fact sheet, "The Biden-Harris Plan to Fight for Workers by Delivering on Buy America and Make It in America"
Biden Takes Aim at Offshoring With Proposed Tax Hike - Alexis Gravely, Tax Notes ($). "Some economists have expressed skepticism that Biden’s proposal would reach its intended goal of bolstering U.S. manufacturing. Kyle Pomerleau, a fellow at the American Enterprise Institute, said in a tweet that increased taxes on foreign profits would affect an asset’s owner more than the asset’s location."
Biden’s Plan to Address Offshoring Comes with Contradictions - Daniel Bunn, Tax Policy Blog. "But the campaign should ask how requiring U.S. companies to pay more in taxes will create more jobs in the U.S. Raising the corporate tax rate, increasing taxes on foreign earnings, and applying a 10 percent surtax when U.S. companies sell back into the U.S. market—effectively a broad tariff—all create incentives against new investment, whether in the U.S. or abroad."
Third quarter estimated tax payments due Sept. 15 - IRS. "Individuals, including sole proprietors, partners and S corporation shareholders, generally make quarterly estimated tax payments if they expect to owe $1,000 or more when their tax return is filed. Taxpayers with income not subject to withholding, including interest, dividends, capital gains, alimony and rental income, normally make estimated tax payments."
A number of designated disaster areas have deferred due dates for the third quarter payments. These include 11 Iowa counties affected by the August 10 windstorm, for which the deadline is deferred to December 15.
Related: IRS Interest Rates for Underpayments, Overpayments Unchanged for 4th Quarter 2020
COVID-19 Coverage Eligibility Doesn’t Block Premium Tax Credit - Frederic Lee, Tax Notes:
“An individual’s eligibility for this coverage for one or more months does not prevent those months from qualifying as coverage months for purposes of determining eligibility for the premium tax credit under section 36B,” the IRS said in Notice 2020-66, 2020-40 IRB 1, released September 9.
California Bill Excludes CARES Act Loans From Gross Income - Tax Analysts. California A.B. 1577 as signed into law excludes covered loan amounts forgiven through the federal Coronavirus Aid, Relief, and Economic Security Act from gross income for state income tax purposes for tax years beginning January 1, 2020.
Link: A.B. 1577
A Quick Look At What’s In The ‘Skinny’ Senate Stimulus Bill (And What’s Not) - Kelly Phillips Erb, Forbes. "The Senate proposal does not include funding for a second round of stimulus checks at any dollar amount."
Retirement Withdrawals, Home Purchases and the 10% Early Withdrawal Penalty - Jason Dinesen. "If you take money out of a retirement account to buy a house (for example to make a down payment), you can avoid the 10% early withdrawal penalty … but only on IRA withdrawals."
The FBAR (Report of Foreign Bank and Financial Accounts): Everything You Need to Know - Jason B. Freeman, Freeman Law Blog. "A failure to file a FBAR report may result in criminal exposure—that is, the possibility of a criminal indictment or investigation."
Related: Offshore Voluntary Disclosure.
Senators push for end of forced deferral of federal employee payroll tax - Kay Bell, Don't Mess With Taxes. "Maryland Sen. Chris Van Hollen spearheaded the bipartisan communication to Treasury Secretary Stephen Mnuchin and Office of Management and Budget (OMB) Director Russell Vought, asking that workers be given the chance to choose whether to participate."
Taxpayer's Failure to Include IP PIN on Return, Triggering E-File Rejection, Did Not Delay the Beginning of the Running of the Statute of Limitations - Ed Zollars, Current Federal Tax Developments. The IP PIN is special number issued to taxpayers whose identities may have been stolen. It is included with the return so the IRS knows that the return is legitimate. "The IRS argued that the rejected return did not count as a return for starting the tolling of the statute as the IP PIN is a required part of the signature..."
What's so bad about picking winners and losers in the tax code? - Scott Greenberg, No Withholding:
Arguments against favoritism in the tax code often invoke the concept of tax neutrality. “Tax neutrality is a widely accepted concept in principle,” writes Jason Furman, who chaired the Council of Economic Advisors during the Obama Administration. “The basic concept is simple: generally the tax system should strive to be neutral so that decisions are made on their economic merits and not for tax reasons.” The Tax Foundation, a center-right think tank, offers a similar definition of neutrality: “Taxes should neither encourage nor discourage personal or business decisions.”
Some readers may be nodding their heads in agreement, but others might not be sold. “Why shouldn’t the tax code simply reward good things and penalize bad things?” — one might ask.
A good roundup of a perennial tax policy issue.
Taxes Matter to the Middle Class — But They Won’t Save It - Joseph Thorndike, Tax Notes Opinions Blog:
“A lot of conservative economists agree with Kevin Hassett [who gets an extensive profile in the book] that corporate taxation holds middle-class incomes down,” Tankersley writes. “A lot of liberals say we should tax high earners significantly more and use the proceeds to invest in poor and middle-class Americans through direct transfers of income or expanded benefits like free college.”
Congress Could Provide Much Needed Assistance By Approving A New Round Of Cash Stimulus Payments - Elaine Maag, TaxVox. "Broad-based cash payments are critical, because other solutions tend to miss people."
Former Luxury Car CEO and Luxury Watch Dealer Admit Tax Charges in Connection with Scheme to Misallocate Limited Edition Sports Cars - UN District Attorney, New Jersey (Defendant name omitted):
Company A produced several highly desired automobile models in small quantities. Defendant had some measure of authority over the allocations of those limited edition automobiles. In 2013, Company A announced it was creating its most exclusive model to date: a “supercar,” limited to only 500 units and carrying a manufacturer’s suggested retail price (MSRP) of approximately $1.4 million. Company A and Company B established a formula to determine which customers would be placed on the approved list to buy a supercar.
After resigning as CEO of Company B, Defendant assisted Company B dealers and supercar purchasers in misallocating supercars in exchange for kickback payments.
Federal Tax Crimes blog proprietor Jack Townsend speculates that that the car involved might be the Ferrari LaFerrari. I'm pretty sure I didn't make the approved buyer list, but at $1.4 million, I might have passed anyway.
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