Key Takeaways
- Overseas filer deadline is June 16.
- How much will Senate changer House tax bill?
- Will House go along with Senate changes?
- Partnership provision makes House Bill.
- Credit Union taxation left out of bill.
- Wild tariff weekend.
- Recording says IRS Commissioner-designate would hire tax shelter figure.
- No Fear Day.
- National Sunscreen Day.
U.S. taxpayers living, working abroad must file 2024 tax return by June 16 deadline - IRS:
A taxpayer qualifies for this automatic extension if:
- They are living outside the United States and Puerto Rico and their main place of business or post of duty is outside the United States and Puerto Rico, or
-They are in military or naval service on duty outside the United States and Puerto Rico.
Related: Eide Bailly Expatriate Tax Services
Budget and Tax Bill: The Senate Awaits
One big, beautiful headache - Jake Sherman and John Bresnahan, Punchbowl News:
“I want the Senate and the senators to make the changes they want. It will go back to the House and we’ll see if we can get them. In some cases, those changes may be something I’d agree with, to be honest. … I think they are going to have changes. Some will be minor, some will be fairly significant.”
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Therein lies the tension for Republicans during the next phase of the reconciliation process. Senate Republicans want changes to the House-approved bill, as Senate Majority Leader John Thune told us. Trump is now greenlighting that process. And House Republicans may end up left holding the bag.
Trump’s ‘Big, Beautiful Bill’ Heads to Senate, Where New Fights Loom - Siobhan Hughes, Richard Rubin, and Lindsay Wise, Wall Street Journal:
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At the top of the list for some lawmakers are deeper cuts to Medicaid, the state-federal healthcare program that insures low-income Americans. Senators might also try to revise a House deal that raises the cap on the deductions for state and local taxes to $40,000 from the current $10,000. That agreement secured crucial votes from House members in high-tax states such as New York and New Jersey, but SALT has no clear champion among Senate Republicans.
Capitol agenda: Megabill heads toward a Senate buzzsaw - Lisa Kashinsky, Mia McCarthy and Ben Leonard, Politico:
Senate Must Make Tricky Process Decision for Tax Bill Changes - Cady Stanton, Tax Notes ($):
The most direct way to change the bill and return it to the House would be to use a substitute amendment, according to PwC’s Rohit Kumar.
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“One of the issues that markups would present is on many of the key committees, including the Finance Committee, you have a one-seat majority,” Kumar said. “And so every member of that committee has significant leverage — hostage-taking powers.”
GOP fears Trump’s ‘big, beautiful bill’ is ‘debt bomb’ - Alexander Bolton, The Hill. "But the problem is that many of the proposals to cut spending already face opposition from other Republican senators."
Things in the House-Passed Bill
Late Add to Tax Bill Toughens Partnership ‘Disguised Sale’ Rules - Michael Rapoport and Chris Cioffi, Bloomberg ($):
The tax code has provisions to prevent that from happening, but some taxpayers have claimed that some such transactions shouldn’t be considered sales because the Treasury Department hasn’t issued regulations deeming them to be sales. To address that, the new bill includes a provision that would make the provision self-executing by changing the language on Treasury’s oversight of such transactions in Section 707(a) from “Under regulations prescribed by the Secretary…” to “Except as provided by the Secretary…"
Related: Eide Bailly Passthrough Entity Consulting Services.
How Electric Vehicles are Targeted by the Republican Policy Bill - Jack Ewing, New York Times. "The measure would gut subsidies for battery manufacturing, incentives for purchases of electric vehicles by individuals and businesses, and money for charging stations that Congress passed during the Biden administration. And it would impose a new annual fee on owners of electric cars and trucks."
Republicans Harness Tax Code to Punish Trump’s Political Nemeses - Andrew Duehren, New York Times. "The legislation, which could change as it heads to the Senate, would raise taxes on universities like Harvard, as well as on immigrants and on companies based in countries with taxes that the Trump administration deems unfair. Owners of major sports franchises, a group that Mr. Trump repeatedly tried and failed to join, would also see a tax increase."
Credit Unions Cheer Omission From GOP Tax Megabill, Eye Senate - Zach Cohen, Bloomberg ($):
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While credit unions typically catered to underserved communities, they’ve grown in size in some cases buying out traditional banks and even naming rights on major sports stadiums. Banks have been using the growth to argue for parity in the tax code.
Tariff Weekend
US allies grapple with trade whiplash - Semafor. "Europe is contending with another bout of Trump’s trade whiplash, after the US president threatened and quickly backed off new levies. The US and European Union now appear to be accelerating talks toward a trade deal, after Trump vowed to delay 50% tariffs on European goods — levies he threatened just Friday — until July 9"
Trump Threatens Fresh Tariffs on EU, iPhones and Rival Devices - Gavin Bade, Meridith McGraw, and Rolfe Winkler, Wall Street Journal:
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“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” he wrote on Truth Social.
“If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.,” the president wrote.
Trump Extends Deadline for 50% Tariffs on EU Goods to July 9 - Jennifer Dlouhy, Bloomberg via MSN:
But on Sunday, Trump said he agrees with recent comments by Treasury Secretary Scott Bessent that the US doesn’t need to bring back textile manufacturing into its borders.
“We’re not looking to make sneakers and T-shirts, and we want to make military equipment,” Trump said, adding he wants to make “big things” in the US, citing chips, computers and AI development.
SALT Cap Workarounds for Some Pass-Through Entities Are Threatened by One, Big, Beautiful Bill - Andrey Yushkov and Jared Walczak, Tax Policy Blog. "Consequently, some pass-through businesses will get the dual benefit of an even higher QBI deduction of 23 percent and continued ability to take advantage of PTETs, while others are denied the benefit of the QBI deduction (a continuation of the status quo) while also losing the ability to deduct their state and local taxes above the cap—even if it’s a higher cap."
IRS happenings
Treasury Blocked From Continuing Mass Layoffs - Mary Katherine Browne, Tax Notes ($):
In a May 22 order in American Federation of Government Employees v. Trump, Judge Susan Illston of the U.S. District Court for the Northern District of California extended her temporary restraining order blocking the federal government from continuing its plans to reduce the federal workforce. The new restraining order is set to last the duration of the lawsuit.
CEO Says Trump’s IRS Pick Promised Big Benefits - Freddy Brewster, The Lever:
The article discusses a recorded Zoom call involving Terry Kennedy, CEO of financial services company Appreciation Financial.
Lifetime Advisors is among a number of firms named in an April 14 letter from Senate Finance Committee Democrats calling for a criminal investigation into a “scheme to sell investors a fraudulent tax shelter.” Long worked with Lifetime Advisors in 2023 after leaving Congress, where he sold various tax products, including some of the same tax credits that Treasury officials told Senate Democrats “do not exist.”
Blogs and Bits
Hurricane season 2025 starts June 1. Get ready now. - Kay Bell, Don't Mess With Taxes. "Your storm readiness includes not only physical preparations, but also financial, including tax, moves to make well before a tropical system or full-fledged hurricane of any size arrives."
The fiscal equivalent of war - Scott Sumner, The Pursuit of Happiness. "This tax bill is almost unimaginably bad."
The Right-Wing Greedflation Myth Begins... - Ryan Bourne, The War on Prices. "Whatever the excuses, Trump’s tariff policy is blatant economic self-harm. When the stock market plunge is followed by rising consumer prices, companies or cartels won’t be at fault. The only businessman to blame will be the occupant of the White House."
The House Budget Bill Fails Key Tax Reform Tests - William Gale and Howard Gleckman, TaxVox:
These aims are challenging and often conflict with one another. But the recently passed House budget bill fails all four tests.
Attention Rolls Royce Fans
Owner of O.C. staffing companies sentenced to 8 years in prison for tax crimes, admits to cheating IRS out of nearly $60 million - IRS (Defendant name omitted, emphasis added):
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From May 2009 to January 2017, Defendant’s companies failed to pay the IRS the payroll taxes for the tax years 2001, 2002, 2003, 2006, 2007, 2008 and 2010, including trust fund taxes that Defendant’s companies withheld from employees’ paychecks. Beginning in June 2007, the IRS attempted to collect Defendant’s outstanding tax liability, including penalties and interest. By February 2017, the outstanding balance had grown to $29,593,378, which included the unpaid taxes, interest and the “Trust Fund Recovery Penalty.”
Defendant attempted to thwart the IRS’s collection efforts by purchasing luxury items from his business bank accounts – including numerous cars and a boat – and concealing his ownership by placing the titles of these items in the names of his businesses and other individuals. Those luxury items included a Ferrari 360 Spider F, a Rolls Royce Phantom, a Duffy D 22 Bay Island boat, a Mercedes-Benz SLS, a Mercedes-Benz G-Class, and a Lamborghini Aventador. Defendant also evaded the IRS’s collection efforts by obtaining a Visa Black credit card in the name of another person (now his wife) to make personal purchases and paid off the credit card using funds from his business bank accounts.
Employment tax crime is easily detected. It's remarkable that the Defendant kept it up for so long. I suppose we can watch the IRS Auctions website in case there might be a cheap Rolls Royce available.
What day is it?
It's "Nothing to Fear Day." It's also National Sunscreen Day, in case you can't get over your fear of sunburn.
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