Tax News & Views Won't Hear Your Case Roundup

Supreme Court declines to take up Covid-related tax dispute over telework - Bernie Becker, Politico. 

The Supreme Court said Monday it would not take up New Hampshire’s challenge to Massachusetts' policy of taxing out-of-state workers, a blow to efforts to bring more nationwide clarity to how states can tax telecommuting employees after Covid scrambled work arrangements.

Massachusetts decided last year to keep taxing out-of-state commuters who work for companies in the state, even if those employees were now telecommuting. 

Related: Telecommuting Workers in Refuge States Complicate State Taxes.

SCOTUS Won’t Hear New Hampshire Remote Worker Tax Fight - Andrea Muse, Tax Notes ($). "New Hampshire asked the Court to preliminarily and permanently enjoin Massachusetts from enforcing the regulation and require Massachusetts to refund the payments it collected from nonresidents under the regulation, along with interest."

Supreme Court Refuses to Hear New Hampshire v. Massachusetts—An Important Case Challenging Massachusetts' Taxation of NH Residents Working Remotely for MA Firms - Ilya Somin, The Volokh Conspiracy. "In my view, the court should have taken the case, and ruled in favor of the New Hampshire. Massachusetts' policy and the arguments supporting it raise broader issues about state taxation of remote workers—a problem that is likely to recur in the future as remote work continues to become more common."

Supreme Court declines to take up remote worker taxation case - Alistair Nevius, The Tax Adviser. "The Supreme Court’s order indicated that Justice Clarence Thomas and Justice Samuel Alito would have granted the motion."

Supreme Court Punts on State Tax Question About Remote Work - Richard Auxier, TaxVox. "By declining to hear a dispute between two New England states, the court maintains the current rule of 'it depends.'"

The Biden tax hikes are coming into view - Rick Newman, Yahoo Finance. "Third is the capital-gains tax rate. Biden wants to raise it from a top rate of 20% to 39.6% for people earning more than $1 million per year. Some Democrats think that is too high, which means there probably aren’t enough votes for that to squeak past very narrow Democratic majorities in both houses. But handicappers think a compromise of around 28% is possible."

Also: "Biden also wants to eliminate a tax break in the estate tax for the wealthy. Republicans will wail about how this will affect family farms (whether true or not) and Democrats might drop it."

Technically we are talking about income tax provisions, not estate tax provisions. Biden's plan would tax capital gains over $1 million with the income tax at death, but has no estate tax provisions.

Biden plan gives moderate Democrats sticker shock - Peter Cohn, Roll Call. "Sen. Joe Manchin III, D-W.Va., says budget reconciliation — which Democrats want to use to pass a filibuster-proof fiscal package with everything his bipartisan group left out — is 'inevitable. But he cautions that size matters. And as House Budget Chairman John Yarmuth says, in his chamber with a four-vote margin 'we’re all Joe Manchin.'" 

No harm, no foul - Bernie Becker, Politico: 

Practically everything seems to be interconnected on tax policy right now, so consider this an early calendar notice to check back in later on a potential year-end tax deal, too.

Now to be clear, so much is up in the air on how and how much — not to mention when — Democrats will be able to raise taxes, and that will certainly influence any potential push for a deal in December that would likely include none of the pain that would come with tax increases.

Here’s what’s on the table — because of the 2017 tax law, companies will start facing a less generous policy for deducting the interest on their debt next year, and less generous write-offs for research and development expenses.

Something to look forward to.

IRS announces "Dirty Dozen" tax scams for 2021 - IRS. Oddly, the IRS press release doesn't list the scams; they will apparently roll out in the coming days. They do preview the categories of scam, including "schemes that persuade taxpayers into unscrupulous actions such as Offer In Compromise mills and syndicated conservation easements." 

The ads that promise settlements on tax debts at "pennies on the dollar," scams?  

COVID-19 tax-related scams top IRS' Dirty Dozen 2021 list - Kay Bell, Don't Mess With Taxes:

Don't fall for stimulus check scams. While the IRS did recently mail letters via the U.S. Postal Service to potential recipients of the AdvCTC, those communications were to let people know they were in the system.

As far as EIPs, the IRS won't initiate contact by phone, email, text, or social media asking for Social Security numbers or other personal or financial information related those and other COVID-related assistance being distributed by the agency.

State Tax Changes Taking Effect July 1, 2021 - Katherine Loughead, Tax Policy Blog.  "Two states, Idaho and Iowa, adopted significant tax rate changes in 2021 with effective dates that are retroactive to January 1, 2021."

When Unprotected Conduct Is Protected Under P.L. 86-272 - Roxanne Bland, Tax Notes. "The statute deprives states of jurisdiction to tax income earned within their borders if the only business activity consists of solicitation of orders for tangible personal property in which customer orders are sent outside the state for approval or rejection and, upon approval, are shipped or delivered to the customer from out of state... When federal law compels conduct that would otherwise cause an out-of-state company to lose P.L. 86-272 protection, a state cannot consider that conduct to assert taxing jurisdiction."

SBA Reported to Be Withdrawing Loan Necessity Questionnaires for PPP Loan Program - Ed Zollars, Current Federal Tax Developments. "The Associated General Contractors of America (AGCA) on June 23, 2021 published a statement which indicated that the SBA will be withdrawing the “Loan Necessity Questionnaire” that applied to borrowers who had PPP loans of over $2 million."

Related: Resources on Relief, Forgiveness and Changing Legislation.

What is the Enhanced Child Tax Credit? - Jay Heflin and Mel Scharz, Eide Bailly. "Beginning on July 15, 2021, the IRS will allow taxpayers to receive an Advance Child Tax Credit, which will be half the total enhanced CTC amount and will go out as monthly payments...For eligible taxpayers, no additional action is required to receive the enhanced CTC if they have already filed, or plan to file, their 2019 or 2020 income tax returns."

Recover IRA Or Pension Damages, But What About Taxes? - Robert Wood, Forbes. "Against this complex backdrop, if your pension is looted or mismanaged and you receive a settlement, can you put it back and sidestep the tax? There is not much tax authority, and it is complex."

TOT Property Holdings Highlights Fundamental Flaw In Conservation Syndications - Peter Reilly, Forbes. "TOT did not attempt to defend the original valuation of $6.9 million. Their new appraiser came up with a before easement valuation of $3.9 million and an after easement value of $1.2 million making for a $2.7 million value of the easement. The IRS appraiser came up with a before value of $1,128,000. He did that without knowing about the arms length transfer which was at a remarkably similar value."

Smile! Today is National Camera Day! As most of us carry a camera with us at all times, on our phones, that would put the consumer cameras of our childhoods to shame, it's an easy holiday to celebrate.