Key Takeaways
- Tax Legislation
- Social Security Taxes
- Energy Credits
- US Steel
- Cannabis
- Direct File
- Marcum Acquisition
- Chevron
- Spin-offs
- ERC
- In the Courts
- What Day is it?
Tax Legislation
Senate Republicans are set to block a child tax credit expansion – Jacob Bogage, Washington Post:
The $79 billion legislation would expand eligibility for the child tax credit, or CTC, among the lowest-income families and adjust payments for inflation for the 2024 and 2025 filing years.
Senate Dems Urge Passage of House-Passed Tax Bill – Asha Glover, Law360 ($):
…
The Senate is scheduled to hold a procedural vote Thursday that, if approved by a majority of senators, would limit debate and allow the chamber to proceed to a vote on the bill.
Washington Prepares for the ‘Super Bowl of Tax’ – Andrew Duehren, New York Times ($):
Across the nation’s capital, preparations are quietly starting for what some are calling the “Super Bowl of tax.” On Capitol Hill, Republicans and Democrats are holding strategy and education sessions. Lobbyists are pressing their case to lawmakers and preparing multimillion-dollar publicity campaigns to defend tax breaks for corporations. Think tanks are churning out research assailing or lauding elements of the byzantine tax code.
Senate Is Set to Kill Bipartisan Tax Bill – Richard Rubin, Wall Street Journal ($):
The bill would revive expired tax provisions that help businesses making capital investments or conducting research, and it would expand the low-income housing tax credit and the child tax credit for low-income families. The legislation would also cut off the employee-retention tax credit, a pandemic-era program riddled with fraud and ineligible claims that has cost more than triple the original estimates. It attracted support from progressive antipoverty groups and the U.S. Chamber of Commerce.
Social Security Taxes
Trump: Scrap Social Security Taxes on Seniors – Alexander Rifaat and Kathleen Murphy, Tax Notes ($):
“Seniors should not pay tax on Social Security,” Trump said in a July 31 post on Truth Social. He didn’t elaborate on how such a move would be paid for or if it would be part of broader Social Security reform.
Energy Credits
Loper Bright Might Boost EV Lawsuit Odds, Manchin Says – Doug Sword, Tax Notes ($).
“The Supreme Court’s recent decision toppling Chevron deference might make it easier for companies to sue and beat the Biden administration over its final clean vehicle tax credit rules, according to a key Senate author of those credits.”
Senators Ask Treasury to Limit Biofuel Tax Credit Eligibility – Dylan Moroses, Law360 ($):
The letter, led by Sen. Sherrod Brown, D-Ohio, and Sen. Roger Marshall, R-Kan., was sent Tuesday to Treasury Secretary Janet Yellen. The lawmakers called on Treasury to limit eligibility for the clean fuel production credit, available beginning next year under Internal Revenue Code Section 45Z, to only those renewable biofuels produced from U.S.-sourced feedstocks.
US Senators Move to Deny China Solar Firms Lucrative Tax Credits – Jennifer A. Dlouhy, Bloomberg:
The measure gives Brown an opportunity to burnish his pro-manufacturing bonafides during a tough reelection contest in Ohio, amid growing scrutiny of Chinese companies building vehicle battery and solar panel factories across the US. Although the legislation is unlikely to swiftly reach a Senate floor vote, a similar proposal could be taken up by the House in September.
AICPA Requests Relaxed Domestic Content Rules for Energy Credits – Mary Katherine Browne, Tax Notes ($):
In a July 31 comment letter, the AICPA requested that in forthcoming proposed regulations, the government provide taxpayers with more adjusted percentage approaches, expand safe harbors for energy properties, clarify guidance on retrofitted projects, and relax certification requirements.
US Steel
Josh Shapiro, a V.P. Contender, Criticized U.S. Steel Takeover and Defended His Tax Cuts – Alan Rappeport, New York Times ($):
Mr. Shapiro’s comments came during an event with Treasury Secretary Janet L. Yellen in Philadelphia. The proposed acquisition of U.S. Steel has become a sensitive political matter this year, with many Democrats, including Senator John Fetterman of Pennsylvania, calling on President Biden to block the deal.
Cannabis
Pot-Friendly States Give Cannabis Sellers Tax Help Denied by IRS – Owen Racer and Angelica Serrano-Roman, Bloomberg ($).
“As states are increasingly adopting more lenient marijuana policies, many that follow the Internal Revenue Code are dropping their adherence to Section 280E, giving cannabis businesses some relief by allowing them to deduct expenses at the state level. More than 20 states allow some deductions for medical or recreational cannabis operations. The latest was Pennsylvania, where the budget Gov. Josh Shapiro (D) signed July 11allows medical cannabis growers and processors to start deducting expenses, though lawmakers accidentally excluded dispensaries.”
Wash. Cannabis Co. Sues Payroll Firm Over Back Taxes – Jonathan Capriel, Law360 ($).
“A Puget Sound-area dispensary is suing Greenleaf HR LLC, a payroll provider specializing in the cannabis industry, and another firm, claiming they failed to pay the IRS on its behalf resulting in a nearly $172,500 tax bill, according to a lawsuit removed to Washington federal court.”
Direct File
GOP Senators Blast IRS Decision to Create Direct File Tool – Erin Slowey, Bloomberg ($):
“This program was not authorized by Congress and is a massive and ill-advised expansion of the power of the IRS,” the letter to Danny Werfel said.
Marcum Acquisition
CBIZ Acquisition of Marcum Marks Latest Audit Market Shakeup – Nicola M. White and Amanda Iacone, Bloomberg ($):
The deal, expected to close by year end, would make CBIZ the seventh largest US accounting firm and could bring in $2.8 billion in combined annual revenue, the firm said.
Chevron
Cos. Insist Chevron Ruling Doesn't Change Deduction Claims – David van den Berg, Law360 ($).
“A medical device company and a food services firm that are each challenging Internal Revenue Service denials of dividend deduction claims told the U.S. Tax Court that the recent U.S. Supreme Court decision overturning Chevron deference doesn't change the validity of their arguments.”
Spin-offs
Tax Advisers Recommend Big Changes to New Spin Guidance – Chandra Wallace, Tax Notes ($):
“Spin-offs are important business-motivated transactions in the life cycle of public corporations,” and constraints in the guidance could force companies to structure in economically inefficient ways or abandon their spin transactions entirely, the New York State Bar Association Tax Section said in a July 30 report.
ERC
Judge Won't Undo IRS' Pause on Worker Retention Credits – Anna Scott Farrell, Law360 ($).
“An Arizona federal judge rejected a tax advisory firm's request to lift the IRS' pause on processing claims for the pandemic-era employee retention credit, saying he wasn't eager to stop the agency from addressing the fraud it alleges has been widespread.”
IRS’s Pandemic Tax Credit Freeze Survives Legal Challenge – John Woolley, Bloomberg ($).
“The IRS can continue with its moratorium on processing new refunds for businesses under a pandemic-era tax relief program after the agency scored an early win in a lawsuit brought by a tax advisory firm who wants the freeze lifted.”
In the Courts
Challenge to Tax Defraud Conspiracy Law Fails – Nathan J. Richman, Tax Notes ($).
“A post-conviction motion for dismissal of a tax conspiracy charge challenging a long-standing interpretation of the statute failed before the trial court but may set up an appellate fight.”
TaxAct Customers' Attys Want $5.8M Fee For $23M Deal – Christine DeRosa, Law360 ($).
“The attorneys for TaxAct Inc. customers who secured a $23 million deal to resolve claims that the company was secretly sharing confidential taxpayer information with Meta and Google asked a federal judge to award them more than $5.8 million in fees for their work.”
$1.1M Tax Refund Claim Needs More Time, Virgin Islands Says – Anna Scott Farrell, Law360 ($).
“A man living on the island of St. Thomas who sued the U.S. Virgin Islands Bureau of Internal Revenue for a $1.1 million tax refund is being audited, the agency told a Virgin Islands federal court, urging it not to move forward with the case.”
Kyocera Denies US Claim That Tax Liability Stops $7 Million Suit – John Woolley, Bloomberg ($).
“A multinational electronics manufacturer contested the US government’s bid to toss its $7.04 million tax refund lawsuit from federal court, disputing an assertion by officials that the company still owes part of its tax assessment.”
What Day is it?
Most importantly, its National Wellness Month! “Research has shown self-care can help increase happiness by up to 71%.” So lets get out there and go for a run or get a massage, or just pledge to drink more water, do it for yourself!
As for today, its Spider-Man Day! In the words of Uncle Ben, “remember, with great power comes great responsibility. “
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