Tax Update Blog

Tax News & Views 1099 Possible Issues Roundup

January 27, 2023 | Blog
By Jay Heflin

Watchdog Calls for More Education for Companies on 1099-K Forms - Naomi Jagoda, Bloomberg ($):

Third-party settlement companies need more education to ensure they don’t incorrectly send 1099-K forms to taxpayers next year for personal transactions, National Taxpayer Advocate Erin Collins said Thursday.

‘If it’s personal, we need to make sure they’re not getting those 1099-Ks,’ Collins said at a conference hosted by the District of Columbia Bar.

The threshold for issuing a 1099-K remains "more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill," according to an IRS announcement that was released on a Friday two days before Christmas - the perfect time to receive any sort of guidance. 

Eide Bailly's write up of the announcement is here

Before December 23, 2022, the reporting threshold for 1099-Ks was $600, according to the IRS FAQ.

Fingers are crossed that 1099-K reporting does not become a quagmire this filing season. 


IRS Juggles Two Retirement Plan Overhauls, Delaying Guidance - Austin Ramsey, Bloomberg ($):

The IRS is generating a revised guidance schedule for upcoming retirement plan interpretations as the agency attempts to handle two sets of major legislative policy overhauls passed in 2019 and 2022.

Similar employer-sponsored workplace retirement plan provisions modified under the 2019 SECURE (Pub.L. 116-94) and 2022 SECURE 2.0 (Pub.L. 117–328) Acts may be combined in upcoming regulatory actions or ‘grab-bag’ question-and-answer guidance, Treasury Department Deputy Benefits Tax Counsel Helen Morrison said Thursday.

 "'Grab bag' question-and-answer guidance." Is that the official term?


Tax Geek Alert:

JCT Blue Book Release Likely in First Half of 2023 – Doug Sword, Tax Notes ($):

The Joint Committee on Taxation expects its explanations for the avalanche of tax provisions passed during the 117th Congress, known as the blue book, to be published by the end of the second quarter.

Besides a quartet of major tax-related bills passed in 2021 and 2022, the blue book will include some, though not all, of the technical corrections for those and other bills, according to Thomas Barthold, the JCT’s chief of staff.


‘Blue Book’ Tax Technical Fix List Not Likely Until Next Month - Chris Cioffi, Bloomberg ($). "The Joint Committee on Taxation’s ‘blue book’ document recapping the past year’s tax law changes won’t be ready until at least the middle of February, a top committee staffer said Wednesday."

'Don’t expect it by Valentine’s,' Thomas Barthold, the committee’s chief of staff, said at a District of Columbia Bar conference.

Bottom line: The Blue Book will be released as early as February or late as June. Important to note: These reporters covered the same guy speaking at the same event. It's seems odd that he offered a five month window for delivering a book that a lot of tax people want. 


Relief for Farmers - Kim Dixon, Bloomberg ($). "Democrats on the Senate Agriculture Committee reintroduced legislation Thursday that would eliminate the tax liability for assistance distressed farmers received in the Inflation Reduction Act."

'The critical financial assistance we fought to include in the Inflation Reduction Act is a lifeline for farmers around the country struggling to hold on to their farms,' said Sen. Cory Booker (D-N.J), the bill’s sponsor. 'However, those same farmers are now facing a burdensome tax liability that can plunge them into deeper debt.'

This is referred to as a "feel good bill." Why? Because the committee that introduced it has no jurisdiction over what the bill is trying to accomplish. 

The legislation seeks to amend the tax code. Booker's Committee has no jurisdiction over that subject.


Extenders for CTC Deal, Continued - Kim Dixon, Bloomberg ($):

Democrats are still open to having conversations about a deal on expanding the child tax credit and extending business tax provisions, but it remains to be seen if such a deal happens, Alice Lin, a tax policy adviser for Senate Finance Committee Democrats, said Thursday.

Speaking at a conference hosted by the District of Columbia Bar, Lin said there are few vehicles for tax legislation in the near future, and the next big vehicle will be in 2025, when a broader number of tax provisions will be in play. Most of the 2017 tax law’s provisions focused on individuals expire after 2025.

Right now, the focus is on the debt ceiling, then the focus will be on funding the federal government. Tax issues are currently on the B list, but that could change, especially if the economy falls into a recession. 


Governors Tackle Cost of Living Issues With a Variety of Tax Plans - Angélica Serrano-Román, Bloomberg ($):

With the new year, governors have started laying out their formal budget and policy agendas for upcoming legislative sessions through inaugural addresses, state of the state speeches, and other kickoff events.

Of note:

While Minnesota Gov. Tim Walz (D) has rolled out many budget and policy proposals recently, this week he touted tax rebates—$1,000 for single taxpayers, $2,000 for joint filers, plus some for dependents—for those with incomes below certain caps.

The plan is here.


Washington Justices Weigh Constitutionality of Capital Gains Tax – Perry Cooper, Bloomberg ($): "Several members of the Washington Supreme Court asked probing questions of both sides in arguments Thursday on constitutionality of the state’s new tax on capital gains."

Washington State Margin Tax Bill Brings Critics to First Hearing - Laura Mahoney, Bloomberg ($). “A proposal to replace Washington state’s business and occupations tax levied on income with a margin tax on gross receipts got a chilly reception during its first hearing in a Senate committee on Thursday.”


OECD Minimum Tax Guidance Expected Soon, Treasury Official Says - Isabel Gottlieb, Bloomberg ($):

The OECD will release further guidance ‘very soon’ on the global minimum tax, a Treasury official said Thursday at a District of Columbia Bar tax conference.

Pillar Two of the global tax deal lets countries adopt rules creating a 15% global minimum tax rate for large multinationals. The EU and other countries will begin applying the rules at the start of next year.

Good luck getting this approved through a Republican House. 


Treasury, IRS Revising Form for Stock Buyback Excise Tax - Erin Slowey, Bloomberg ($):

The Treasury and IRS are revising the draft Form 720 and working on instructions for the 1% excise tax on corporate stock repurchases, a Treasury official said Thursday at the District of Columbia Bar tax conference.

Companies will report their buyback taxes annually for the first full quarter after the end of the taxable year on the Form 720, according to guidance released in December.

The December guidance is here.


From the “When Are His 15 Minutes Up?” file:

Manchin Rages Against Attempts to Broaden EV Tax Credit - Keith Laing, Bloomberg ($):

Senator Joe Manchin is pushing back against efforts to apply broad interpretations to a tax credit for electric vehicles that he largely wrote.

The fight came to head Thursday when Manchin, a West Virginia Democrat, failed to win quick passage of a Senate bill that would halt the credits, worth as much as $7,500, until implementation rules are finalized for the Inflation Reduction Act, which passed last year after he weighed in heavily on it.

The legislation, known as the IRA, has been hailed as a major piece of industrial and climate policy, with about $500 billion in spending and tax breaks including for EVs and renewable energy.

How many other lawmakers have issues with the IRA? Nearly all of them. Why not interview them?

Senator Manchin chairs the chamber’s Energy and Natural Resources Committee, which does not have jurisdiction over tax credits.

He does not sit on the Senate Finance Committee, which has jurisdiction over tax credits. Why do we care what he thinks about tax credits? 

This article would have more oomph if Senate Finance Chairman Ron Wyden (D-Ore.) had issues with the tax credits. Perhaps he should be interviewed? I've spoken to him. He's very friendly - even polite - and is open to speaking with reporters. 


Its National Fun At Work Day and Friday! Coincidence?!? Nope! It’s the last Friday in January every year. So have at it!

Stay informed!

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.