Tax News & Views New Administration Roundup

January 20, 2021

Yellen Says Corporate Tax Increase Can Wait for Now.  Jad Chamseddine, Tax Notes.

Those worried about an immediate tax hike under Biden can perhaps relax, at least for now.  "Raising the corporate tax rate will take a back seat until the country emerges from the economic downturn caused by the COVID-19 pandemic, Treasury Secretary nominee Janet Yellen assured Senate Republicans."

Notice 2021-13.  IRS.  Penalty relief for tax capital reporting. 

Good news: "The purpose of this notice is to provide partnerships with relief from certain penalties due to the inclusion of incorrect information in reporting their partners' beginning capital account balances on the 2020 Schedules K-1 (Form 1065) and the 2020 Schedules K-1 (Form 8865) as outlined in the 2020 Instructions for Form 1065, U.S. Return of Partnership Income (2020 Form 1065 Instructions).

Bad news: partnerships still must report each partner's tax capital on schedules K1.

New York City Top Earners Face Highest Income Tax in U.S. Under Cuomo Proposal. Jimmy Vielkind, WSJ.

For those of us living outside NY who complain about federal rates, it could be worse. 

"New York Gov. Andrew Cuomo proposed raising the state’s top income-tax rate by 2 percentage points, an increase that would mean New York City residents in the top bracket would pay the highest combined local tax rate in the country."

Brokering Deals in Split Senate Runs Through Centrist Senators.  Nancy Ognanovich, Bloomberg Tax.

Just how is legislation (including tax bills) enacted in a 50/50 Senate?

"A coalition of senators who’ve shown a willingness to cross party lines is crucial to incoming Majority Leader Chuck Schumer‘s ability to push President-elect Joe Biden’s ambitious agenda in the closely divided chamber.

The dynamic kicks off Wednesday, as Biden and Vice President-elect Kamala Harris are inaugurated and, with the swearing-in of three new senators, Democrats take control of the Senate.

To break logjams, Schumer may turn to a group that includes Democrats Joe Manchin(W.V.) and Chris Coons ( Del.) and Republicans Susan Collins (Maine), Lisa Murkowski (Alaska), and Mitt Romney (Utah), who were instrumental last month in forging a compromise on the $900 billion coronovirus stimulus package."

As Biden prepares to take office, Trump lawyers ask judge for help in tax return fight. Brian Faler, Politico.

"President Trump’s lawyers are asking a federal judge for a conference call Wednesday to discuss what happens next with House Democrats’ long-running suit for his tax returns as the party is poised to take control of both Congress and the White House."



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