Key Takeaways
- Tax bill senate updates.
- Trump savings accounts.
- Energy credits in tax bill.
- Foreign revenge tax.
- IRS funding claw back.
- Sizable FBAR penalties.
- National Peanut Better Cookie Day!
Speaker Mike Johnson said in an interview Wednesday that while he believed Republicans were “on track” for final passage by the self-imposed deadline, that depended on the Senate approving a bill that hews close to the version that passed the House last month.
“We’ll see what they produce,” Johnson said, adding: “I just need them to come to their final decisions on everything. So we’ll see how it shapes up.”
Privately, top leadership aides believe that while the Senate could still finish its work by July 4, the process might take several more weeks — or months — if the Senate departs dramatically from the House product.
“We’ll see what they produce,” Johnson said, adding: “I just need them to come to their final decisions on everything. So we’ll see how it shapes up.”
Privately, top leadership aides believe that while the Senate could still finish its work by July 4, the process might take several more weeks — or months — if the Senate departs dramatically from the House product.
Senate Republicans Want to Trim Some of Trump’s Populist Tax Cuts - Andrew Duehren, New York Times:
Senate Republicans are searching for cuts because of growing concern among some conservatives, as well as on Wall Street, about the bill’s impact on the country’s fiscal situation. While paring back some of Mr. Trump’s campaign promises could help keep the cost of the legislation near what it was in the House, some lawmakers are calling for much deeper spending cuts.
Senate tax changes hit House where it hurts - Laura Weiss and Andrew Desiderio, Punchbowl News:
Senate Finance Committee Chair Mike Crapo (R-Idaho) told GOP senators Wednesday that he plans to scale back the House’s SALT cap deal and rework repeals of clean energy tax credits from the Inflation Reduction Act.
The changes could put Speaker Mike Johnson in a perilous position in his quest to get the reconciliation bill done by July 4.
The changes could put Speaker Mike Johnson in a perilous position in his quest to get the reconciliation bill done by July 4.
Business tax incentives will grow, SALT will be cut, Crapo tells senators - Benjamin Guggenheim and Jordan Carney, Politico:
He told GOP senators he plans to cap SALT at a lower level than the $40,000 deal Speaker Mike Johnson cut with his own members. Blue-state GOP lawmakers are already raising warning bells over the plan, which Senate Majority Leader John Thune first outlined to POLITICO.
Crapo didn’t give a precise SALT number in the meeting, attendees said, but some GOP senators have floated going down to $20,000 while others are floating that they should offer the House the same $30,000 that Johnson initially offered to his holdout members.
Crapo didn’t give a precise SALT number in the meeting, attendees said, but some GOP senators have floated going down to $20,000 while others are floating that they should offer the House the same $30,000 that Johnson initially offered to his holdout members.
Tax Bill - Trump Savings Accounts
‘Trump Accounts’ Could Be Better. Here’s How. - Alex Muresianu, Tax Foundation:
Proponents of Trump Accounts say they will promote saving and long-term wealth. However, the account owners would need to withdraw the full balance of the account by age 31 to avoid the money being taxed as income. This requirement is counterintuitive to encouraging truly long-term saving and wealth building.
3 Key Tax Considerations For The $1,000 Trump Savings Accounts - Nathan Goldman, Forbes:
1. The Money In the Trump Savings Accounts Grows Tax-Deferred
2. Some Gains From The Trump Savings Accounts Will Be Capital, Others Gains Will Be Ordinary
3. The Trump Savings Accounts Are Regressive
2. Some Gains From The Trump Savings Accounts Will Be Capital, Others Gains Will Be Ordinary
3. The Trump Savings Accounts Are Regressive
Tax Bill - Energy Credits
How the IRA Provisions (and Scores) Have Changed - Alex Muresianu, Tax Foundation:
The final House bill makes impressive cuts to the IRA green energy tax credits, but it does so in part by introducing more complexity. Instead of relying on complex sourcing rules to bring the credit costs down, the Senate could reduce credit rates while eliminating wasteful strings, such as prevailing wage and apprenticeship requirements and bonus credits for targeted areas. The Senate could also nix the House’s expansion of the clean fuel production credit. On the whole, the Senate should at least match, or even expand upon, the House’s net cuts in terms of scale, but it can do so with an eye towards simplification.
Tax Tensions In The Senate - Renu Zaretsky, Tax Policy Center:
Senators seek to rescue hydrogen tax credit dropped from House bill. Key Senate Republicans are pushing to preserve a hydrogen production tax credit that was eliminated in the House’s tax package. The incentive, part of the Biden-era climate law, offers up to $3 per kilogram of hydrogen and is currently scheduled to run through 2033. But under the House bill, it would expire at the end of this year for new projects.
Tax Bill - Proposed Section 899
Scott Bessent Defends ‘Revenge Tax’ Proposal - Richard Rubin, Wall Street Journal:
Treasury Secretary Scott Bessent defended the need for the controversial “revenge tax” in Republicans’ tax-and-spending megabill.
...
Bessent, testifying at the House Ways and Means Committee, said a response was necessary to defend U.S. fiscal sovereignty.
“This bill will allow us to prevent our corporate revenues from being drained into foreign treasuries, and that is in the hundreds of billions of dollars,” he said.
...
Bessent, testifying at the House Ways and Means Committee, said a response was necessary to defend U.S. fiscal sovereignty.
“This bill will allow us to prevent our corporate revenues from being drained into foreign treasuries, and that is in the hundreds of billions of dollars,” he said.
Tax News & Views International Weekly: More International Tax Changes Coming? - Alex Parker, Eide Bailly:
But for most of the bill’s major items, the goal is to negate the 2017 Tax Cuts and Jobs Act’s expirations and keep the tax code as it is. This is especially true for the international provisions. While the version of the bill passed by the House of Representatives last month does include a retaliatory provision targeted at “discriminatory” foreign taxes, the bill otherwise only makes slight tweaks to the international framework put in place by the TCJA.
Tax Pros Scramble to Fill in the Gaps on Revenge Tax - Jonathan Curry, Tax Notes ($):
The legislative language is surprisingly detailed in its objectives and instructions compared with other new legislative proposals that often avoid hard questions by granting broad rulemaking authority to Treasury, Jeffrey Tebbs of Miller & Chevalier Chtd. said during a June 11 D.C. Bar event. Still, Treasury would have to exercise an enormous amount of rulemaking authority to fill in the gaps of a brand new section 899, he said.
Blogs and Bits
Uncle Sam's tax break gifts for fathers - Kay Bell, Don't Mess With Taxes:
There also are several tax-favored benefits for parents who want to save for their children’s educations, both K-through-12 and college. These include Coverdell education savings accounts, 529 plans, the American Opportunity and Lifetime Learning Credits, and the above-the-line tax deduction for student loan interest.
Navigating Tax Refund Litigation: A Deep Dive into the Variance Doctrine and Schedule C Deductions - Ed Zollars, Current Federal Tax Developments:
This case serves as a stark reminder of the paramount importance of accurately and comprehensively asserting all grounds for a tax refund claim, in writing, during the administrative process, to avoid jurisdictional preclusion in subsequent litigation. Tax professionals must ensure that refund claims precisely detail the legal basis and supporting facts to facilitate proper IRS review and preserve all potential avenues for relief.
IRS
White House Wants to Claw Back the Last of IRS’s Special Funding - Doug Sword, Tax Notes ($):
President Trump is proposing what appears to be a final clawback of the money remaining from the Inflation Reduction Act’s $79.6 billion in IRS funds allocated in August 2022. After three years of congressional clawbacks plus completed or obligated spending, the proposed $16.5 billion clawback would finish off the extra IRA funding, with perhaps some small amount remaining for business systems modernization (BSM).
Tax Trouble
US Consultant In France Must Pay $2M In FBAR Penalties - Kat Lucero, Law 360 Tax Authority ($):
An American energy consultant residing in France must pay more than $2 million in penalties for purposely not disclosing foreign bank accounts that held more than $3 million, as opposed to the under $30,000 initially reported, a D.C. federal court ruled.
...
Debrick then tried to amend his FBAR filing through a defunct offshore voluntary disclosure program within the Internal Revenue Service. The situation could have been resolved if Debrick had paid a reduced penalty for not initially reporting the other accounts, according to the opinion. Instead, he lied under penalty of perjury about his control of International Oil & Gas Associates and two trusts, where he shifted the funds to from the foreign accounts, the opinion said.
...
Debrick then tried to amend his FBAR filing through a defunct offshore voluntary disclosure program within the Internal Revenue Service. The situation could have been resolved if Debrick had paid a reduced penalty for not initially reporting the other accounts, according to the opinion. Instead, he lied under penalty of perjury about his control of International Oil & Gas Associates and two trusts, where he shifted the funds to from the foreign accounts, the opinion said.
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