Manchin Won't Agree To Build Back Better Tax Proposals - Asha Glover, Law360 ($):
The West Virginia Democrat, speaking on West Virginia MetroNews' "Talkline," said his support for a pared-down version of the Build Back Better Act has hinged on the findings of the latest consumer price index report. The report, which was released Wednesday, showed that the consumer price index increased by 9.1% over the last year. "I can't make that decision on taxes of any type and also on the energy and climate because it takes the taxes to pay for the investment in the clean energy technology that I'm in favor of," Manchin said. "But I'm not going to do something in overreach that causes more problems."
Manchin Plays Spoiler Again by Halting Biden’s Economic Agenda - Steven T. Dennis and Erik Wasson, Accounting Today:
The West Virginia senator said Friday it wouldn’t be “prudent” to act now on climate and tax plans crafted to get his support without seeing another month of inflation data first.
Ultimatum on Budget Package Splits Congress, Biden - Benjamin Guggenheim and Doug Sword, Tax Notes ($):
House Ways and Means Committee Chair Richard E. Neal, D-Mass., said the afternoon of July 15 that he trusts that Manchin remains open to a climate and tax package and is willing to wait until after the August recess to move on reconciliation.
However, a statement released by President Biden later in the day directed Congress to pass the drug pricing bill immediately and get it to his desk before the end of July. Biden said he would address the climate crisis instead through executive action.
Global tax deal threatened as Senate dysfunction delays vote - Laura Davison, Accounting Today:
The U.S. Senate has an increasingly narrow path forward after Senator Joe Manchin said he wants to wait until September to consider a bill that included committing to a 15% global minimum corporate tax, the cornerstone of a deal that Treasury Secretary Janet Yellen helped negotiate with nearly 140 countries last year.
Biden and OECD Tax Proposals Would Hurt FDI - Alex Durante, Tax Foundation:
The Biden administration has proposed several changes to the U.S. international tax system that would raise taxes on multinational enterprises (MNEs). Similarly, the OECD’s tax proposals would raise taxes on MNEs. Together, the proposals would affect patterns of international investment and potentially decrease the volume of foreign direct investment (FDI).
Under the tax proposals in the House Build Back Better Act (BBBA), the deduction for Global Intangible Low-Taxed Income (GILTI) would be reduced to 28.5 percent (from the current 50 percent), raising the minimum tax from 10.5 percent to 15 percent (aside from the foreign tax credit haircut).
Rettig Defends IRS Against Audits Of Comey, McCabe - David van den Berg, Law360 ($):
"Internal Revenue Service Commissioner Chuck Rettig on Friday defended the agency and its workforce against claims that audits of former FBI officials James Comey and Andrew McCabe were improper. Rettig said if the agency had made an error, it would be "very transparent" about it. But whether he's in or out of government, Rettig said, he won't ever allow anyone to "tarnish the image and reputation" of the agency or its employees."
Contribution Deduction Disallowed Due to Assignment of Income and Failure to Comply with Acknowledgment Requirements - Ed Zollars, CPA, Current Federal Tax Developments:
"A taxpayer was denied a deduction for a contribution on two separate grounds. First, the Court found that the taxpayers had failed to give away the entire asset in question, resulting in an anticipatory assignment of income and, second, the taxpayers did not obtain a proper contemporary written acknowledgment of the contribution."
Form 1099-R Mailed to Prior Address Did Not Create Reasonable Cause for Failing to Report $238,000 Distribution - Ed Zollars, CPA, Current Federal Tax Developments:
"Taxpayers argued they should not be liable for an accuracy related penalty under IRC §6662 related to their failure to report an IRA distribution when the Form 1099-R had been sent to their former, rather than current, address. The Tax Court found, in these circumstances, that there was not reasonable cause for their failure to report the distribution despite the Form 1099-R being sent to the wrong address."
International Tax Cases To Watch In The Second Half Of 2022 - Natalie Olivo, Law360 ($):
As the second half of the year unfolds, courts across the country will weigh in on several closely watched cases where companies have claimed the Internal Revenue Service and U.S. Department of the Treasury reached beyond their authority — specifically, when making income adjustments or writing regulations. Coca-Cola, for example, is expected to appeal its loss in a $3.3 billion transfer pricing dispute in the U.S. Tax Court, where the beverage giant argued the IRS unconstitutionally changed methods for calculating the company's tax liability.
3M, Liberty Global, FedEx, Perrigo, and Medtronic have pending cases to watch. Also keep and eye on the FBAR Penalty case.
IRS, Rev. Rul. 2022-14 on Section 1274, Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property - irs.gov
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