Tax News & Views Not Again! Roundup

December 16, 2022

IRS Accidentally Releases 112,000 Taxpayers’ Private Data Again – Chris Cioffi, Bloomberg ($) (bold and italics not added):

Confidential data of about 112,000 taxpayers inadvertently published by the IRS over the summer was mistakenly republished in late November and remained online until early December, the IRS disclosed Thursday.

Form 990-T data that was supposed to stay private had been taken offline but made its way back to the IRS site when a contractor uploaded an old file that still included most of the private information, a letter sent Thursday to congressional leaders said. The agency is required to make Form 990-Ts filed by nonprofit groups available online but is supposed to keep the form filed by individuals private; in both cases, the agency made that information available too.

Twice! In one year!

IRS Again Discloses Data From EO Forms – Fred Stokeld, Tax Notes ($). “For the second time this year, the IRS has mistakenly disclosed information submitted by tax-exempt organizations reporting income unrelated to their exempt purposes.”


Treasury Rule on Company Owners Has ‘Highest’ Security Standard - Michael Rapoport, Bloomberg ($):

Access to newly disclosed information about companies’ ownership would be limited and safeguarded, and misuse of the information would be subject to penalties including prison time, under a new regulation the Treasury Department proposed Thursday.

The proposed rule (RIN 1506-AB59) governs who will be able to use 'beneficial ownership' information that millions of US and foreign companies must disclose to Treasury’s Financial Crimes Enforcement Network, or FinCEN, starting in 2024. FinCEN announced the new system in September.

'Safeguarded.' See above articles. 

Background: This effort is being headed by Treasury’s Financial Crimes Enforcement Network (FinCEN). Its directive is to suss-out money laundering, terrorist financing, among other things. Details on what is being proposed is here.


New IRS Office to Focus on Tax and Climate Law Implementation - Isabel Gottlieb and Lauren Vella, Bloomberg ($):

A new IRS office will be devoted to overseeing the agency’s implementation of the 2022 tax-and-climate law, according to an IRS financial report released Thursday.

The IRA Transformation & Implementation Office will monitor how the agency implements the tax provisions from the Inflation Reduction Act. Four subsidiary units will support the new office, focusing on 'implementation of new tax law provisions, taxpayer services transformation, tax compliance transformation and human capital transformation,' according to the report.

The report is here, which, in part, states:

[T]he truly transformational investment in the recently passed Inflation reduction Act of 2022 (IRA) provides nearly $80 billion to the Irs through FY 2031 for increased enforcement, investments in information technology modernization and improvements to taxpayer services.

Maybe throw a few more bucks toward "information technology modernization." Again, see top article. 

White House guidebook on IRA provisions is here.


Buying a Used EV? IRS Clarifies How You Can Get a Tax Credit - Josh Lowenthal, Bloomberg ($). “Expanding the electric vehicle tax credit to include used vehicles will encourage more people to buy an EV. But the additional reporting obligations could create administrative headaches at the IRS…”


DeLauro: Omnibus spending package dropping Monday – Aidan Quigley and David Lerman, Roll Call:

Appropriators plan to introduce a long-awaited omnibus spending package Monday afternoon in the Senate and pass it before Christmas Eve, House Appropriations Chair Rosa DeLauro said Thursday.

Will it include tax provisions? Who knows, but tax provisions would be germane to the bill.  

The House on Thursday sent a shell bill to the Senate to use as the vehicle, enabling senators to add the omnibus and any unrelated authorizing and tax provisions lawmakers agree to. The procedural mechanism also allows the Senate to skip one cloture vote, though on final passage they would still need 60 votes to end debate if there are objections.


Senate Passes One-Week Spending Bill to Avert Saturday Shutdown – Erik Wasson, Bloomberg ($):

The Senate on Thursday night passed a one-week government funding bill intended to avert a Saturday shutdown, sending the measure to President Joe Biden for his signature.

State of Play: Congress has until December 23rd to pass "omnibus" legislation that funds the federal government through the end of the fiscal year, which is September 30, 2023. This bill could include tax provisions related to retirement, business and possibly families. We will know what is included in the omnibus bill when it is released, which is currently expected to happen on Monday (see related article). 

Tax Deal Prospects - Alex Clearfield, Bloomberg ($):

Ways and Means Committee Chair Richard Neal (D-Mass.) said Thursday he could see the contours of a deal on tax extenders if Republicans will give more on the child tax credit.

‘We continue the negotiations. The conversations are ongoing. I still can see the contours of a big deal,’ he said. ‘A reminder that on some of those they should be slam dunks and with a couple that are more contentious I can see room for a tradeoff. It’s not like I’m intransigent on some of the requests the Republicans have. If anything I’m open to them. But I do think some movement on the CTC would make some sense.’

Whether a bunch of tax provisions get added to the spending bill will largely depend on lawmakers agreeing to expand the Child Tax Credit. So far, there isn't enough support among lawmakers to modify the provision. 

Rumor: Lawmakers are trying to see if they can pass a narrow list of tax provisions without an agreement on the Child Tax Credit. The retirement bill (Secure 2.0) is a part of this discussion. 


Tax Court Pondering Three Options for Ballooning Easement Docket - Aysha Bagchi, Bloomberg ($):

The US Tax Court is considering at least three options for handling the hundreds of syndicated conservation easement cases it faces, including potentially clustering cases, according to comments Senior Judge Mark Holmes shared exclusively with Bloomberg Tax.

The court’s judges have discussed consolidating cases to try them together, picking out test cases, or assigning whole clusters of similar cases to particular judges, Holmes said. Some cases within the potential clusters could also be consolidated or used as guideposts for settlement negotiations, he added.


San Francisco Warns of Budget Gap as Remote Work Clips Revenue - Romy Varghese, Bloomberg ($). “San Francisco is projecting a $728 million budget gap over the next two fiscal years as the technology hub reels from the economic hit of remote work and the depletion of one-time federal aid.”


NJ Lawmakers OK Ending Tax Assessment Deadline Extension – Paul Williams, Law360 Tax Authority ($):

New Jersey would end its pandemic-related suspension of the statute of limitations for tax assessments and adopt the Multistate Tax Commission's model statute for handling partnership tax adjustments under a bill approved by state lawmakers Thursday.


Kentucky Supreme Court Strikes Down School Choice Tax Credits - Perry Cooper, Bloomberg ($). “A Kentucky law granting income tax credits to residents who set aside money to fund private education violates the state constitution, the state high court ruled Thursday.”


Va. Gov. Seeks Lower Rates, More Deductions In $1B In Cuts – Maria Koklanaris, Law360 Tax Authority ($):

Virginia Gov. Glenn Youngkin proposed an additional $1 billion in state tax cuts and rate reductions Thursday as he warned of an economic slowdown but also said that the commonwealth is currently swimming in money.

The Republican Youngkin's plans, if enacted, would be amendments to the commonwealth's current two-year budget. The $1 billion would be on top of about $4 billion in cuts already enacted in that budget, in which the commonwealth nearly doubled the standard deduction to $8,000 for single filers and $16,000 for those filing jointly, sent out a check for $250 to single filers and $500 for those filing jointly, and got rid of the commonwealth's 1.5-percentage-point portion of Virginia's 2.5% grocery tax, among other provisions.


NYC Weed Crackdown Nets More Than $4 Million in Illegal Products - Gregory Korte, Bloomberg ($). “Authorities have seized more than 100,000 cannabis products worth more than $4 million in New York City as part of an effort to clear the way for licensed vendors as the state tries to legalize — and tax — a lucrative retail market for marijuana.”


IRS Weighs Compliance Concerns Over Passive-Investment Rules - Michael Rapoport, Bloomberg ($):

The IRS is actively working to finalize its regulations on passive foreign investment companies and partnership elections, and is considering the complaints heard from the partnerships’ partners about compliance burdens, an IRS official said Thursday.

The IRS has to balance the taxpayers’ concerns with its own, but ‘we are taking the comments we received into consideration,’ said Melinda Harvey, a branch chief in the IRS Office of Associate Chief Counsel (International), speaking at a George Washington University Law School conference in Washington.


EU Confirms Minimum Tax as Part of Package Agreement - Stephen Gardner, Bloomberg ($):

The European Union confirmed its adoption of the 15% global minimum tax Thursday after Poland lifted a last-minute reservation.

The Council of the EU, in which EU governments meet, had issued a statement Monday saying the bloc’s countries agreed unanimously on the minimum tax, but Poland subsequently hesitated to formally sign off on the plan.


Christmas comes early! It’s National Chocolate Covered Anything Day! “On this day, dip and drizzle your favorite foods in every kind of chocolate imaginable,” states National Day Calendar. I’m on it!

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