Tax News & Views Be a Kid Again Roundup

Expanded NII Tax Is First Tax Provision in Reconciliation Rewrite - Doug Sword, Tax Notes ($):

Senate Democrats have agreed on the first tax component to include in their revamped reconciliation bill — an expansion of the net investment income tax to cover more income from passthrough businesses.

The 3.8 percent NII tax, instituted by the Affordable Care Act and also known as the unearned income Medicare contribution, would apply to individual filers making more than $400,000 or $500,000 for joint filers, trusts, and estates, and it would be expanded to apply to income derived in the ordinary course of a trade or business. The current thresholds are $200,000 and $250,000.

Dems' climate and tax agenda to consume Congress in July - Burgess Everett and Marianne Levine, Politico:

“I am generally optimistic. I’ll believe it when there’s a deal,” said Sen. Chris Coons (D-Del.) on Thursday. “I believe there is positive momentum, I believe there have been constructive conversations. But the specifics, the details, I think it’s best to let that work itself out.”

Tax policy remains unfinished as well. Democrats have not finalized which tax increases on corporations and the wealthy will be used and international taxation policy remains in flux, according to a person with direct knowledge of the negotiations.

Biden’s Economic Plan Races the Clock on Capitol Hill (Podcast) - Patrick Ambrosio, Bloomberg Tax ($):

The Biden administration and Democratic lawmakers are quickly running out of time to move a revamped tax, climate, and health care package before the midterm elections.

There have been some recent signs of progress, with tentative agreements on prescription drugs and extending the solvency of Medicare. But there are still many issues to hash out and not much time to do it.

Drug company AbbVie used Trump tax law to shield profits, Senate report finds - Nathaniel Weixel, The Hill:

Pharmaceutical giant AbbVie generates almost all of its sales in the United States but has allegedly exploited former President Trump’s tax law to shield much of its sales from taxes, according to an interim report released Thursday by  Democrats on the Senate Finance Committee.

The report details how loopholes in the 2017 tax law have allowed AbbVie, a large multinational corporation headquartered in the U.S., to substantially shrink its tax burden and stash profits overseas to avoid paying taxes on prescription drug sales.

IRS chief faces questions over audits of Trump foes - Jeff Stein, The Washington Post:

The commissioner of the Internal Revenue Service faces a new onslaught of questions after a report Wednesday showed that two foes of President Donald Trump had been selected for a rare audit.

The IRS commissioner’s term is to expire in November, and Biden administration officials had already begun interviewing potential candidates for his replacement before this week’s news, according to two people familiar with the matter, who spoke on the condition of anonymity to describe private conversations. 

Former IRS Officials Skeptical of Foul Play in Comey, McCabe Audits - Jonathan Curry, Tax Notes ($):

Former IRS officials familiar with the highly selective audit process that ensnared two top rivals of former President Trump say the IRS is likely innocent of wrongdoing, despite the seemingly impossible odds.

“It looks odd. But there’s a huge chasm between that and [alleging that] funny business was going on,” Robert Kerr, a former director in the IRS Office of Research, told Tax Notes.

Let the Child Tax Credit Work - Ian Berlin and William G. Gale, Tax Policy Center:

Last year, the American Rescue Plan expanded the CTC, paid it monthly, and made it fully refundable, meaning that the entire amount could be received even by low-income families with little or no earnings. These changes reduced the monthly child poverty rate by about one-third\ beginning with the first payment in July 2021, keeping 3.7 million children off of the poverty rolls by the end of the year. Food insecurity for recipients also fell by 6.1 percentage points, far outpacing the decline in food insecurity amongst non-recipients. But the expansion and full refundability expired at the end of 2021.

Congress is now considering making the 2021 changes permanent. Recently, during a hearing of the House Select Committee on Economic Disparity and Fairness in Growth, several Republican committee members criticized the expanded CTC, claiming that it disincentivized work.

Crypto Collapse Threatens to Leave Black, Hispanic Investors Further Behind - Paula Cachero, Bloomberg Tax ($): "Crypto assets that lured investors of color with the promise of quick wealth are now in freefall, threatening to widen existing inequities in financial markets."

"While the perks of remote working remain a compelling peak in the topography for job satisfaction, employees and employers alike need to also consider some valleys that accompany remote work.

And there is a big one: taxes."

Enjoy the weekend and celebrate BE A KID AGAIN DAY all weekend long!