Key Takeaways
- Tax Legislation
- Tax Return Consequences
- Basis Shifting
- IRS
- Global Minimum Tax
- Tariffs
- Federal Workforce Cuts
- Funding Cuts
- TIGTA
- In the Courts
- Carousel Day
Tax Legislation
Possible Tax Extenders Bill Could Embrace Offsets – Cady Stanton, Tax Notes ($):
As lawmakers consider a package to address extending temporary provisions that didn’t make it into the reconciliation bill, they’ll have to decide whether to break with tradition and offset the extenders, being mindful of the debate over the prior bill that put the national debt under a spotlight.
Stolen Tax Refund Check Recovery Bill Gets Senate Momentum – Chris Cioffi, Bloomberg ($). “Taxpayers who have paper IRS refund checks stolen or lost in the mail would be eligible for electronic payments under a House-passed measure that’s getting traction in the Senate.”
Get Ready for New Rules on Tax Breaks for Charitable Giving – Laura Saunders, Wall Street Journal:
Unlike some other recent changes, these don’t take effect until 2026—so donors who care about maximizing charitable tax breaks have months to prepare. After that, the changes are permanent, at least until Congress alters the law again.
Tax Return Consequences
Falsifying a Tax Return Can Cost Your Citizenship Under Trump – Umar Farooq & Ellen M. Gilmer, Bloomberg ($):
But under President Donald Trump’s administration, something as mundane as under-reporting income on a tax return could mean you are no longer a US citizen.
Last month, in an extension of Trump’s immigration crackdown, the Justice Department made denaturalization one of five enforcement priorities for the agency’s Civil Division. The unit will now look at individuals in any of 10 priority areas, along with the catch-all of “any other cases” the agency determines “sufficiently important to pursue.”
Basis Shifting
Republicans Push IRS to Withdraw Basis-Shifting Revenue Ruling – Kristen A. Parillo, Tax Notes ($):
Rev. Rul. 2024-14, 2024-28 IRB 18, “applies a flawed interpretation of the economic substance doctrine in a manner that lacks clear statutory grounding,” Ways and Means Committee members Lloyd Smucker, R-Pa., and Mike Kelly, R-Pa., wrote in a July 23 letter to Long that was signed by 18 other Republican committee members.
GOP Reps. Urge IRS To Roll Back Economic Substance Ruling – Asha Glover, Law360 ($):
The IRS should scrap Revenue Ruling 2024-14, which allows the agency to deny tax benefits tied to partnership transactions that engage in three variations of basis stripping for lacking economic substance under Internal Revenue Code Section 7701, the committee members said. The lawmakers, which included Tax Subcommittee Chair Mike Kelly, R-Pa., made their recommendation in a letter addressed to IRS Commissioner Billy Long.
IRS
IRS considers eliminating non-English language tax services – Jacob Bogage, Washington Post. “Trump administration officials are considering eliminating multi-language services at the IRS, according to records obtained by The Washington Post and two people familiar with the situation, a move that would make it dramatically more difficult for non-English-speaking individuals to file their taxes.”
Global Minimum Tax
Global Minimum Tax Rule May Prevent US Edge Under G7 Deal – Somesh Jha, Bloomberg ($):
As long as countries continue to adopt a 15% corporate minimum tax locally, known as a qualified domestic minimum top-up tax under the OECD’s Pillar Two framework, US multinationals are unlikely to enjoy a major tax advantage over global competitors, practitioners say.
Tariffs
EU Prepared To Impose €93B In Tariffs On US Goods – Josh White, Law360 ($):
All European Union countries except Hungary agreed to combine two tranches of tariffs — one that applies to goods such as alcohol and poultry, worth €21 billion, and a second widely reported to apply to items such as cars and planes, worth €72 billion — into one package. The measures will come into force Aug. 7 if negotiations fail and the U.S. goes ahead with its threatened 30% tariffs on Aug. 1, an EU trade spokesperson said at a Brussels news conference Wednesday, before the vote by the EU's executive branch.
Federal Workforce Cuts
Trump Lawyers Disclose List of Deep Federal Workforce Cuts – Ian Kullgren, Bloomberg ($):
The administration, at a federal judge’s request, Thursday turned over information on its reduction-in-force plans, after months of resistance. The list offers one of the most detailed looks yet at Trump’s plan to radically overhaul the federal workforce, though many questions remain unanswered.
The document denotes 40 layoff plans at 17 agencies, from Treasury to the National Endowment for the Humanities, reviewed by the Office of Personnel Management between March 10 and April 13. While some have been announced by the administration, others haven’t been previously disclosed. The plans have renewed relevance in the wake of a US Supreme Court decision allowing layoffs to proceed amid a legal challenge.
Funding Cuts
Trump Signs Bill with Funding Cuts to Foreign Aid and NPR, PBS – Kate Sullivan, Bloomberg ($). “President Donald Trump on Thursday signed a $9 billion package of spending cuts that ends federal funding for public broadcasters and reduces foreign aid, the White House said.”
TIGTA
IRS Watchdog Sees Staff Loss Amid Budget Uncertainty – Benjamin Valdez, Tax Notes ($):
The IRS watchdog has lost 15 percent of its 800-person workforce since October 2024, a spokesperson for TIGTA told Tax Notes July 24.
In the Courts
IRS Can Levy Religious Group's Property, Split 9th Circ. Says – Kat Lucero, Law360 ($). “The IRS can impose a lien on an Arizona residential property held by a religious organization to collect unpaid taxes owed by a bankrupt couple who had decision-making authority over the entity's finances and bank account, a divided Ninth Circuit ruled Thursday.”
Professional Employer Org Cites Wage Payer Role for Credits – Erin McManus, Tax Notes ($). “A professional employer organization is wrapping up its series of summary judgment arguments in the Tax Court, focusing on the benefits it provides to its clients and the benefits it says Congress intended with a pair of employment tax credits.”
8th Circ. Says Biz Owner Can't Claim $100K Tax Refund – Anna Scott Farrell, Law360 ($). “A business owner is not entitled to a $100,000 tax refund or compensation for lost business opportunities he said the government owed him for making him wait for it, the Eighth Circuit said, affirming an Iowa federal court's decision.”
What Day is it?
Want to feel like a kid again? You can, because its Carousel Day, or National Merry-Go-Round Day! “Carousels are not exactly a modern phenomenon, as their existence has been traced to 500 A.D in the Byzantine Empire where ancient drawings depict a fascinating carousel style.” Wow!
