Key Takeaways
- Tax bill senate updates.
- Cost of proposed tax bill.
- Concerns over tax bill's effects on US deficit.
- Conservation easement valuation in the courts.
- Corporate AMT interim regs.
- World bicycle day!
Capitol agenda: New megabill text dropping this week - Lisa Kashinsky, Ben Leonard, and Maia Nehme, Politico:
Senate committees will start rolling out their portions of the GOP megabill as soon as Tuesday, providing a first look at how Republicans in the chamber plan to address some of the House’s most controversial proposals.
Here’s the draft-text timeline POLITICO reported Monday night, though it could change:
— Armed Services plans to release its text Tuesday
— Environment and Public Works is pushing for Wednesday
— Commerce is aiming for Thursday
— Banking is expected Friday
Here’s the draft-text timeline POLITICO reported Monday night, though it could change:
— Armed Services plans to release its text Tuesday
— Environment and Public Works is pushing for Wednesday
— Commerce is aiming for Thursday
— Banking is expected Friday
Trump, Thune push Senate GOP on reconciliation timeline - Andrew Desiderio, Laura Weiss, John Bresnahan, Jack Sherman, and Max Cohen, Punchbowl News:
Trump hosted Thune for a meeting at the White House on Monday. The president phoned a few other GOP senators who have reservations about the House GOP version of reconciliation, including Sens. Josh Hawley (R-Mo.) and Ron Johnson (R-Wis.). Trump met with Sen. Rick Scott (R-Fla.) in-person. He’s also spoken with Sen. Rand Paul (R-Ky.), who has publicly opposed the reconciliation package over the debt-limit increase.
Trump’s aggressive posture underscores the White House and Senate GOP leadership’s need for speed. Trump posted Monday that he wants a bill to sign by July 4. Setting fast-approaching deadlines has been an asset for GOP leadership during the process so far, but this timeline will require warpspeed.
Trump’s aggressive posture underscores the White House and Senate GOP leadership’s need for speed. Trump posted Monday that he wants a bill to sign by July 4. Setting fast-approaching deadlines has been an asset for GOP leadership during the process so far, but this timeline will require warpspeed.
Trump Looks to Shore Up Support for GOP Megabill - Alex Leary, Richard Rubin, and Michael R. Gordon, Wall Street Journal:
Trump is expected to amplify calls for Republican unity around what the party has branded the “big, beautiful bill” and speak with Senate Majority Leader John Thune (R., S.D.) about the next steps as lawmakers return from recess, a senior official said Sunday. But Thune, like his counterpart in the House, has a narrow majority and a number of GOP senators have expressed concerns that could derail a July 4 target of getting the bill to Trump’s desk.
The GOP Megabill Policies on the Senate Chopping Block - Jasmine Li, Wall Street Journal:
Several tax proposals in the bill would have negligible effects on revenue, according to estimates from the congressional Joint Committee on Taxation, making them more prone to challenges in the Senate.
These include a provision to halt bans or regulations on contingency fees—used by tax professionals to pocket a percentage of the prospective tax refunds or savings they help clients obtain. The IRS has tried to crack down on these fees over the years, arguing that they motivate abuse among tax professionals. Other proposals estimated by the joint committee to have negligible fiscal impact include raising penalties for unauthorized disclosures of taxpayer information, and some tax adjustments for private foundations and nonprofit organizations.
These include a provision to halt bans or regulations on contingency fees—used by tax professionals to pocket a percentage of the prospective tax refunds or savings they help clients obtain. The IRS has tried to crack down on these fees over the years, arguing that they motivate abuse among tax professionals. Other proposals estimated by the joint committee to have negligible fiscal impact include raising penalties for unauthorized disclosures of taxpayer information, and some tax adjustments for private foundations and nonprofit organizations.
Cost of the Tax Bill
JCT Updates Report on Revenue Effects of House Tax Bill - Tax Analysts, Tax Notes ($):
The Joint Committee on Taxation on June 2 updated estimates (JCX-26-25R) of the revenue effects of tax provisions of the House-passed reconciliation bill, estimating the cost to be $3.8 trillion from 2025 to 2034.
The revisions include changes made to the bill before its House passage, including the removal of the indoor tanning excise tax, the inclusion of the exception to the business meals deduction, the restoration of the taxable real estate investment trust subsidiary test, and changes to indexing alternative minimum tax thresholds.
The revisions include changes made to the bill before its House passage, including the removal of the indoor tanning excise tax, the inclusion of the exception to the business meals deduction, the restoration of the taxable real estate investment trust subsidiary test, and changes to indexing alternative minimum tax thresholds.
Economists Question G.O.P. Bill: Why Increase the Deficit in Good Times? - Ben Casselman and Colby Smith, New York Times:
The worry, long expressed by Mr. Romer and other economists, is that investors will eventually balk at lending the government money, or will demand punishingly high interest rates for doing so. That could set off a downward spiral in which rising interest payments add further to the debt, making investors increasingly reluctant to lend and eventually driving up the cost of government borrowing even higher.
No one knows exactly when that will happen. But economists warn that by increasing the debt during a period of relative economic strength, the government is running the risk that the tipping point will come at the worst possible moment, when the government needs to run large deficits to respond to a war or another crisis.
No one knows exactly when that will happen. But economists warn that by increasing the debt during a period of relative economic strength, the government is running the risk that the tipping point will come at the worst possible moment, when the government needs to run large deficits to respond to a war or another crisis.
Wall Street Is Sounding the Alarm on U.S. Debt. This Time, It’s Worth Listening. - Spencer Jakab, Wall Street Journal:
The package of tax-and-spending measures sent to the Senate, now officially called the One Big Beautiful Bill Act, could act like budgetary wolf bait. It would add around $3 trillion to debt levels over the next decade compared with existing estimates and $5 trillion if certain temporary features were made permanent, according to the nonpartisan Committee for a Responsible Federal Budget.
For perspective, federal interest this fiscal year already will be more than the defense budget and more than Medicaid, disability insurance and food stamps combined.
For perspective, federal interest this fiscal year already will be more than the defense budget and more than Medicaid, disability insurance and food stamps combined.
In the Courts
Tax Court Scrutinizes Conservation Easement Valuation and Penalties in Beaverdam Creek Holdings, LLC v. Commissioner - Ed Zollars, Current Federal Tax Developments:
This case serves as a stark reminder that while the HBU analysis may support a property’s potential for mineral extraction, the valuation must reflect what a hypothetical willing buyer would pay for the property itself, considering actual market data, rather than the speculative NPV of a hypothetical business operation. It also highlights the importance of thorough, market-based valuations and the severe consequences of gross valuation misstatements in conservation easement contributions.
IRS Regs
The Internal Revenue Service released temporary regulations Monday that offered a simplified method for large companies seeking to determine whether the 15% corporate alternative minimum tax applies to them, as well as penalty relief for those that underpaid the levy this year.
The simplified method provides an adjustment to a company's average adjustable financial statement income, or AFSI, thresholds over a three-year period used to assess companies' status as applicable corporations subject to the tax under Internal Revenue Code Section 55 , according to Notice 2025-27.
The simplified method provides an adjustment to a company's average adjustable financial statement income, or AFSI, thresholds over a three-year period used to assess companies' status as applicable corporations subject to the tax under Internal Revenue Code Section 55 , according to Notice 2025-27.
Blogs and Bits
Estimated taxes, summer cleaning, and other June tax moves - Kay Bell, Don't Mess with Taxes:
1. Pay your estimated taxes. Millions of us must make these extra tax payments each year. The money goes to Uncle Sam to cover income we get that’s not subject to withholding, such as earnings from gig work or other self-employment jobs, prize or gambling winnings, or investment income. Some Social Security recipients who must pay tax on these government retirement benefits also pay that amount via estimated taxes.
The June deadline for all these folks usually is June 15, but this year it’s pushed to Monday, June 16, because the 15th is on Sunday. This month’s payment is the second estimated tax amount for 2025, and is for income earned in April and May.
The June deadline for all these folks usually is June 15, but this year it’s pushed to Monday, June 16, because the 15th is on Sunday. This month’s payment is the second estimated tax amount for 2025, and is for income earned in April and May.
New Report, Same Result—High-Tax States Lose Residents, Low-Tax States Gain Them - Adam A. Millsap, Forbes:
It is not a coincidence that on average the states that gained the most residents and AGI are lower tax states while those that lost residents and AGI are higher-tax states. The average top individual income tax rate in the top five gaining states was 4.1%. In the bottom five states it was 8.6%, or more than double. In the Tax Foundation’s more comprehensive ranking of state tax climates, New York, New Jersey, California, and Massachusetts all rank in the bottom 10, while Illinois ranks 37th. Florida, Texas, North Carolina, and Arizona are all in the top 15. Among the top gainers, only South Carolina falls outside the top 15 at number 33. The states in the top five also have warmer weather than those in the bottom five, apart from California, and that certainly explains some of their appeal. But policies matter, too, and high taxes repel residents, especially higher earners.
Tax Trouble
Oconee County man indicted for failing to report $1M income on taxes - IRS (defendant name omitted):
According to court documents and statements made in court, Defendant operated a landscaping business in the Upstate and allegedly failed to report cashed business checks as income to the IRS from 2019 to 2022. Defendant failed to report approximately $1,006,633.00 in income.
Defendant faces a maximum penalty of three years in federal prison, a $100,000 fine and one year of supervised release to follow any term of imprisonment. U.S. District Judge Jacquelyn D Austin will preside over the case.
Defendant faces a maximum penalty of three years in federal prison, a $100,000 fine and one year of supervised release to follow any term of imprisonment. U.S. District Judge Jacquelyn D Austin will preside over the case.
What day is it?
It's World Bicycle Day!