Key Takeaways
- Tax Legislation
- Election
- Disaster Relief
- IRS Enforcement
- Looper
- Direct File
- Crypto
- Bankruptcy
- Conservation Easements
- ERC
- In the Courts
- Elephant Day
Tax Legislation
Backers Seek to Peel Off Housing Tax Credit for Separate Vote – Samantha Handler, Bloomberg ($):
Sen. Maria Cantwell (D-Wash.) introduced a measure last month that would expand the low-income housing tax credit, in an effort to spark congressional action in September or the lame-duck session.
Election
Harris backs ending taxes on tips, weeks after Trump made similar pledge – Annabelle Timsit, Washington Post. “Vice President Kamala Harris is echoing an idea first proposed by her opponent, Donald Trump, by pledging that she would push to eliminate taxes on tips.”
Trump’s Tax Plan Could Add to Debt Burden. Harris’s Plan Tracks Biden’s. – Jim Tankersley, New York Times:
Independent analyses suggest Mr. Trump’s plans could add close to $4 trillion over the next decade to America’s already fast-growing national debt, even after factoring in additional revenues from new taxes he wants to impose on imports.
Disaster Relief
Affected taxpayers in South Carolina, North Carolina, Florida and Georgia now have until Feb. 3, 2025, to file various federal individual and business tax returns and make tax payments.
IRS Delays Tax Deadlines In 4 States After Hurricane Debby – Jack McLoone, Law360 ($):
The relief will be automatically granted to any individual or business within the disaster area designated by the Federal Emergency Management Agency, which covers all of South Carolina, 66 counties in North Carolina, 61 counties in Florida and 55 counties in Georgia, the IRS said in a news release. Any areas added later would also be eligible for the relief.
IRS Enforcement
You Haven’t Filed Your Tax Returns in Recent Years? The IRS Is Coming – Tom Herman, Wall Street Journal:
Early this year, the IRS began sending compliance letters to people who made $400,000 or more in years for which they didn’t file a return. Some of those people made $1 million or more. The IRS recommends either filing those missing returns pronto, or explaining why you don’t need to do so. “People receiving these letters should take immediate action to avoid additional follow-up notices, higher penalties as well as increasingly stronger enforcement measures,” the IRS warns.
Related: Eide Bailly IRS Exam Help
Looper
Stock Buyback Funding Rule Fails the ‘Best’ Test, SIFMA Says – Chandra Wallace, Tax Notes ($). “The proposed funding rule applying the 1 percent stock buyback excise tax to foreign affiliate repurchases doesn’t apply the best reading of the statute, which the Supreme Court now requires, according to a financial industry group.”
Direct File
IRS Direct File to Be Offered in Connecticut Next Year – David van den Berg, Law360 ($):
At least 290,000 Connecticut taxpayers will be able to use the Direct File tool in the 2025 filing season, according to the statement.
Crypto
6th Circ. Partially Revives Crypto IRS Reporting Challenge – Katryna Perera, Law360 ($). “The Sixth Circuit issued a mixed ruling Friday in a suit brought by a group of cryptocurrency users challenging the IRS' pending mandate to report large crypto transactions, reversing the dismissal of the suit's Fourth and First Amendment violation claims but affirming that some of the case's claims are not ripe.”
The new draft of Form 1099-DA, Digital Asset Proceeds From Broker Transactions PDF, reflects the final regulations for custodial broker reporting and includes the transitional relief described in Notice 2024-56, Notice 2024-57 and Revenue Procedure 2024-28. Interested parties can provide the IRS with comments about the draft at the forms and publications comments page on IRS.gov.
IRS Eases Crypto Reporting Burdens in Updated Draft Form – Erin Schilling and Caleb Harshberger, Bloomberg ($):
The updated draft of Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is a welcome improvement from an earlier iteration of the form, cryptocurrency tax professionals said.
Latest IRS Crypto Reporting Form Has Fewer Requirements – Mary Katherine Browne, Tax Notes ($):
The revised draft of the updated Form 1099-DA, “Digital Asset Proceeds From Broker Transactions,” released August 8 on the IRS website, will be used to report certain sales and exchanges of digital assets taking place during 2025.
Crypto Transaction Disclosure Suit Can Proceed Sans Final Rule – John Woolley, Bloomberg ($):
IRC Section 6050I requires businesses to disclose details to the IRS about cash transactions that exceed $10,000, and the 2021 bipartisan infrastructure law expanded that requirement to digital assets transactions, effective Jan. 1, 2024.
Bankruptcy
US Says High Court Must Undo Bankruptcy Clawback of IRS Payments – Alex Wolf, Bloomberg ($):
Specifically, the justices should reverse a 2023 ruling by the US Court of Appeals for the Tenth Circuit finding that the bankruptcy trustee liquidating the estate of transportation company All Resort Group Inc. was permitted to claw back the company’s 2014 transfer of $145,000 to the IRS, Solicitor General Elizabeth Prelogar said in a filing Thursday.
Conservation Easements
Conservation Easement Donor Sues IRS For $33.9 Million Deduction – John Woolley, Bloomberg ($). “The IRS should allow a $33.9 million charitable contribution tax deduction for a conservation easement donation, a Alabama-based donor told the US Tax Court.”
ERC
Pennsylvania Law Firm Sues US Over ERC Tax Credit Claim Delay – Tristan Navera, Bloomberg ($):
The law firm seeks to recover its delayed $790,000 ERC credit, according to the lawsuit filed in the US District Court for the Eastern District of Pennsylvania on Thursday.
In the Courts
Kyocera Targets Treasury TCJA Reg, Seeking $7M Tax Refund – Kevin Pinner, Law360 ($):
As Kyocera noted in a motion filed Friday, Treasury's regulation, issued in mid-2019 under Section 1.78-1 of the Internal Revenue Code, changed the effective date of new restrictions under the 2017 Tax Cuts and Jobs Act. The TCJA clearly states that the new restrictions on deductions for foreign tax credits deemed paid under Section 78 of the code applies to tax years beginning after Dec. 31, 2017, but the regulation makes them applicable to tax years beginning before Jan.1, 2018, according to Kyocera's motion for partial summary judgment.
Disbarred Lawyer Can’t Force the IRS to Follow Compromise – Nathan J. Richman, Tax Notes ($). “The invocation of contract principles wasn’t enough to generate jurisdiction to hear a couple’s claim that the IRS should be bound by an offer in compromise the agency repudiated, according to a federal district court.”
What Day is it?
Its World Elephant Day! “It is estimated that, every day, 100 African elephants are killed by poachers. The desire for ivory in Asian markets has led to the slaughter of thousands of elephants. World Elephant Day was created to raise awareness and create change to save these majestic creatures.”
We're Here to Help
