January 4, 2023
Opponents deny McCarthy speaker’s gavel on first vote - Lindsey McPherson, Roll Call:
McCarthy “declined” an offer conservatives made to get him 218 votes in the speaker’s race, Perry said.
Specifically, he said conservatives asked for “firm commitments” that the House would vote on a balanced budget, a “fair tax” bill that would gut the IRS and replace the income tax system with a national sales tax, border legislation from Texas Republicans and congressional term limits.
"Fair tax?" Real 2005 energy in the House.
IRS Defines Terms For Clean Vehicle Credit - Kat Lucero, Law360 Tax Authority ($):
Tax-and-Climate Law Guidance Set to Dominate IRS Agenda in 2023 - Erin Slowey, Lauren Vella, Naomi Jagoda, Michael Rapoport, and Isabel Gottlieb, Bloomberg ($):
“We need guidance across the spectrum,” said Alex Leff, partner at the law firm Clifford Chance.
In particular, Leff said he seeks guidance on the direct pay provision available for tax-exempt entities in the Inflation Reduction Act. Direct pay allows for government entities and nonprofit organizations to obtain a refund for clean energy projects.
IRS Could Boost Procurement With New Modernization Funding - Lauren Loricchio, Tax Notes ($):
John Koskinen, who was IRS commissioner during the Obama administration, told Tax Notes that it’s challenging for the IRS to have work done over more than one year because of the annual appropriations process.
“For IT procurement and modernization, to be able to plan over two, three, four years, [for] the work that’s going to get done and to be able to contract for it without the kind of stop [and] start that goes on with the annual appropriation process is just a sea change,” Koskinen said.
IRS Sees Crypto Companies as Potential Crime-Fighting Partners - Richard Vanderford, Wall Street Journal. The article features an interview with Thomas Fattorusso, special agent in charge of IRS Criminal Investigation’s New York office:
WSJ: Are you getting the level of cooperation and partnership from cryptocurrency companies that you would like?
Mr. Fattorusso: That’s something that we’re always working toward. I can’t say whether we’re receiving that or not, but that’s always the end goal, to have those partnerships and to have a relationship that isn’t contentious. More of a symbiotic relationship.
It helps them in their legitimacy. This is a new industry for everybody. I think we’re still trying to feel our way around it. The companies are feeling their way around it.
Something to keep in mind when people say Cryptocurrency is a way around paying taxes.
Related: New Tax Guidance Issued on Cryptocurrency Transactions.
Multiple Churches May Be Violating Politicking Ban, Group Says - Fred Stokeld, Tax Notes ($):
Amendment, the section 501(c)(3) provision that bars partisan political activity by churches and charities, the Freedom From Religion Foundation (FFRF) said in a December 29, 2022, release, which included a series of letters it sent to the IRS several weeks earlier.
“The Internal Revenue Code states that to retain their 501(c)(3) status an organization cannot ‘participate in, or intervene in, . . . any political campaign on behalf of (or in opposition to) any candidate for public office,’” the FFRF told the IRS.
Related: How to Protect your Tax-Exempt Status
MFJ taxpayers need to look out for this tax payment SNAFU - Roger Russell, Accounting Today. "Taxpayers who file as married filing jointly and make a balance-due payment online may find their payment somehow does not get credited to their account."
Welcome back: What now on new tax rules for gig workers? - Bernie Becker, Politico. "For starters, what authority did the tax collector have to delay the new 1099-K requirements? ...What’s working in the IRS’s favor here is that no one’s really complaining."
Lessons From Quill 30 Years Later - Annette Nellen, Tax Notes ($). "A significant question remains even after Wayfair: How can all the concerns of consumers and local and remote merchants of all sizes, states, and constitutional provisions be considered so that taxes can be collected effectively with certainty and minimal costs to businesses and consumers?"
Related: A Sales Tax Reform Game Changer: How Wayfair Changed the Sales Tax Reform Landscape.
4 tax moves to make this January 2023 - Kay Bell, Don't Mess With Taxes. "1. Pay your estimated taxes. Yes, Uncle Sam has his hand out early every year. The middle of January is a tax pay day for the millions of filers (including me!). We must close out the 2022 tax year by sending the Internal Revenue Service our final estimated tax payment for the prior year."
Taxpayers who lost money in FTX must wait on answers - National Association of Tax Professionals. "The good news is that, while it is not clear how the losses will be reported, it does look like U.S. customers will be able to claim at least some of their losses on their federal income tax returns. Unfortunately, with FTX winding its way through a bankruptcy process that may take years to resolve, it is unlikely that the size of the losses individual customers may claim will be established before U.S. taxpayers will need to file their 2022 returns in April 2023."
Debtors Cannot Hide Funds by Parking Them With the IRS as Estimated Tax Payments - Parker Tax Pro Library. "A bankruptcy court granted a bankruptcy trustee's motion for summary judgment against the IRS after finding that (1) five transfers of tax payments to the IRS by the debtors in the case were transfers of an interest of the debtors in property, (2) the transfers were made within two years of the debtors filing their bankruptcy petition, (3) the debtors received less than a reasonably equivalent value in exchange for the transfers, and (4) the debtors were insolvent or became insolvent as a result of the transfers."
Start Your 2023 Mileage Log - Russ Fox, Taxable Talk. "Why, you ask? Because if you want to deduct all of your business mileage, you must do this!"
Death of the American Abroad – Is the Estate a US or Foreign Estate? What to do with Undeclared Foreign Assets? - Virginia La Torre Jeker, Virginia - US Tax Talk.
Year-End Collection: Tax Oddities of 2022 -- David Stewart, Nathan Richman, Emily Hollingsworth, Kiarra Strocko, and Alexander Peter, Tax Notes Opinions. "The issue on appeal for this case was whether Mega Marshmallows should be zero-rated for VAT purposes under U.K. law. Just as the name suggests, the marshmallows are larger than your regular-sized marshmallows. And under U.K. law, generally supplies of food for human consumption are zero-rated, with the exclusion being confectionary. Just to clarify, regular marshmallows are considered confectionary because they're not generally used for cooking. They are eaten as is."Treasury issues interim guidance on new stock buy-back 1% excise tax - Mark Friedlich, Wolters Kluwer Tax & Accounting. "IRA provided that a 'covered corporation' generally is a domestic corporation the stock of which is traded on an established securities market."
Why So Many Accountants Are Quitting - Lindsay Ellis, Wall Street Journal. "One significant barrier to entry remains for many newly minted accounting graduates. To earn a certified public accountant license, a professional needs 150 credit hours, or 30 college credits beyond the typical 120-hour bachelor’s degree requirement. The 10 extra classes can add up to a fifth year of college, which can cost tens of thousands of dollars in additional tuition and fees."
Dogs, Taxes, And Choices - Renu Zaretsky, TaxVox. "So if you own a dog, license it and pay the tax or fee. Keep your dog up to date on its rabies vaccinations, and have it proudly wear its tag. You’ll help your neighbors avoid rabies shots, and you'll support public services that help animals."
Trump’s taxes are Exhibit A in the case for why the IRS needs a big upgrade - Steven Rosenthal, Washington Post. "But when they failed, he did not report as income the hundreds of millions of dollars in debts that his lenders wrote off, which the law generally requires. Rather, Trump claimed he was exempt from declaring this income, notwithstanding his own lawyers’ assessment that, if challenged, his prospect of prevailing was 50-50 at best. There are no signs the IRS ever challenged him."
Is Congress Weaponizing The IRS By Releasing Trump’s Tax Returns? Amber Gray-Fenner, Forbes. "To those who opposed the release of the returns, the release seems less about the efficacy of the IRS mandatory program for presidential audits (which exists primarily to relieve any individual at the IRS of the responsibility of deciding whether or not to audit the president’s tax returns) than simple retaliation."
Chrisleys Can't Extend Prison Report Date In Bank Fraud Case - Tom Lotshaw, Law360 Tax Authority ($):
U.S. District Judge Eleanor L. Ross denied that request Friday. Judge Ross did, however, grant their request to direct the government to respond to their motions for bond pending appeal by Friday, in advance of a hearing in Atlanta on Jan. 10.
According to prosecutors, the reality TV stars built an empire based on lies and greed, using falsified documents to fraudulently secure $36 million in loans from nearly a dozen banks, many of which were community banks in the Atlanta area, and hiding their earnings through a production company to avoid paying taxes. Prosecutors said the 29 loans were issued over several years since 2006 and put three banks into receivership.
Reality TV getting a little too real.
IRS-CI counts down top 10 cases of 2022 - IRS. Many covered already in the Roundup, including one where two men received long sentences (11 years and eight years): "The men conspired to promote a nationwide tax fraud scheme to more than 200 participants in at least 19 states causing more than $64 million in false tax refund claims filed. Their scheme involved recruiting clients and preparing false tax returns on the clients' behalf by convincing them their mortgages and other debts entitled them to tax refunds."
When your tax preparer hasn't heard of a tax savings tool, there's a good chance it's a scam.
If you make it to the end of this post, you should celebrate National Trivia Day today!
This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.