Key Takeaways
- Tariffs
- OBBBA
- Government Funding
- Bankruptcy Court
- IRS
- DOJ
- In the Courts
- Lighthouse Day
Tariffs
The Latest: US import taxes hit levels not seen in nearly 100 years – Associated Press, Washington Post:
Despite the immediate impact, the Trump White House is confident businesses will ramp up new investments and jump-start hiring in ways that can rebalance the U.S. economy as a manufacturing power.
As Trump’s Tariffs Reorder World Trade, Hardest-Hit Countries Rush to Respond – Tony Romm and River Akira Davis, New York Times:
But Mr. Trump remained ebullient, heralding on social media overnight how his withering duties had raised considerable new revenue, while one of his top advisers signaled by morning there could be more taxes on imports still to come.
Trump’s Higher Tariffs Are Here. Now What? – New York Times:
Trading partners are scrambling to negotiate better terms, while many of their industries — Japan’s automakers, for one — reel from the protectionist attack. Here’s a country-by-country tariff tracker.
But investors appear to be shrugging off the potential hit to global commerce. Stocks in Asia and Europe were trading mostly higher, helped by decent earnings that suggest that some companies are holding up. That’s in part because many deeply involved in international trade, like the shipping giant Maersk and Chinese exporters, have found resilient demand outside the U.S.
Staggering U.S. Tariffs Begin as Trump Widens Trade War – Tony Romm, New York Times:
Few of America’s major trading partners were spared under Mr. Trump’s updated slate of duties, which together have sent the average effective U.S. tariff rate to its highest level in nearly a century. In the hours before the import taxes took effect, the president signaled there would be more to come, as he doubled down on a strategy that has driven up prices, constrained growth and spooked consumers and businesses around the world.
OBBBA
3 Key Foreign Entity Issues in Claiming Clean Energy Credits – Kat Lucero, Law 360 ($):
The budget law, enacted July 4, set much earlier sunset dates for the clean electricity investment and production tax credits under Internal Revenue Code Sections 48E and 45Y for solar and wind development projects. At the same time, it preserved a longer runway for other lower-emission energy credit projects, such as those for geothermal and energy storage.
However, the law also included a major catch for the Section 48E and Section 45Y provisions and other incentives that benefit from these longer timelines: a highly complicated web of restrictions to ban projects linked to foreign entities of concern, or FEOCs, from taking advantage of the incentives.
Minimum Taxes Come Back to Bite Businesses Claiming OBBBA Cuts – Jonathan Curry, Tax Notes ($):
Big businesses have an assortment of tax cuts to avail themselves of, thanks to the new law. Instead of amortizing domestic research and experimentation expenditures over five years, businesses can now fully expense domestic R&E costs. The OBBBA also restores bonus depreciation and makes largely taxpayer-favorable changes to global intangible low-taxed income and the deduction for foreign-derived intangible income, among others.
OBBBA Subjects More Income Types to Endowment Tax – Katie Lobosco, Tax Notes ($):
The One Big Beautiful Bill Act (OBBBA, P.L. 119-21), signed by President Trump on July 4, will replace a 1.4 percent tax on NII with a three-tiered rate structure based on the size of the school’s endowment and the number of tuition-paying students.
GOP Group Argues Gambling Loss Provision Should Stay As-Is – Cady Stanton, Tax Notes ($):
The group, Advancing American Freedom, authored an August 4 memo arguing that Congress should keep a provision from the One Big Beautiful Bill Act (P.L. 119-21) that caps the deduction for gambling losses at 90 percent after December 31. The change would raise $1.1 billion in tax revenue over 10 years, according to an estimate (JCX-35-25) by the Joint Committee on Taxation.
Government Funding
Lawmakers Face Sour Mood, Senate Progress as Shutdown Date Nears – Jack Fitzpatrick, Bloomberg ($):
The debate over government-funding bills has mostly featured accusations about obstruction and partisanship. The Trump administration’s use of partisan — and sometimes unilateral — methods to block spending has driven an especially large wedge between Republicans and Democrats. And bickering over niche issues has stalled progress on spending legislation.
Trump Spending Clash Splits Democrats on Fighting or Dealmaking – Steven T. Dennis, Bloomberg ($):
After six months of getting steamrolled by Trump and the Republican Congress, prominent Democrats including Senators Elizabeth Warren, Cory Booker and Chris Murphy are demanding party leaders take a harder line against Trump as the president circumvents checks and balances and consolidates power.
Bankruptcy Court
Bankruptcy Crime Referrals from Trustees Rarely Get Prosecuted – Angélica Serrano-Román, Bloomberg ($):
…
The US Trustee—the Justice Department’s bankruptcy watchdog—made an average of 2,271 referrals annually over the past six years, according to agency reports. Yet only about 40 people were charged with bankruptcy crimes on average annually during that period, and it’s unclear how many of those cases stemmed from a referral by a trustee, judge, or court receiver.
IRS
Senator Asks IRS to Probe Nonprofit’s Alleged Terrorist Ties – Kelsey Brooks, Tax Notes ($):
In an August 4 letter to IRS Commissioner Billy Long, Cotton alleged that the Council on American-Islamic Relations (CAIR), a section 501(c)(3) organization, has “ties to terrorist organizations, including Hamas and the Muslim Brotherhood, and their activities.” Cotton alluded to section 501(p), which provides for the suspension of tax-exempt status of organizations found to be supporting terrorism.
DOJ
DOJ Says $47M Fat Brands Tax Case Not a Priority – Anna Scott Farrell, Law 360 ($):
Federal prosecutors cited two memos, including one from Attorney General Pam Bondi, in responding Tuesday to a judge's order to explain why they asked to drop their case against the global restaurant franchiser and Andrew Wiederhorn, its former chief executive.
In the Courts
Fifth Circuit Holds CTA Constitutional Challenge in Abeyance – Amanda Athanasiou, Tax Notes ($). “The Fifth Circuit has joined two other appellate courts in pausing litigation over the constitutionality of the Corporate Transparency Act (CTA), despite its agreement that an interim beneficial ownership reporting rule doesn’t moot the case.”
US Gets $10 Million Judgment Against Military Bribery Convict – Tristan Navera, Bloomberg ($). “The United States won an order requiring the former owner of a trucking business who was caught in a bribery scheme to pay nearly $10 million in back taxes.”
Tax Court Finds Holes in Lawyer’s Collection Review Case – Trevor Sikes, Tax Notes ($). “Collection actions against a lawyer’s outstanding tax liabilities were proper because she failed to act and made frivolous claims, the Tax Court ruled.”
No IRS Error In Lien Against Lawyer, Tax Court Says – Anna Scott Farrell, Law 360 ($). “The IRS' appeals office did nothing wrong in sustaining a tax lien against an attorney who asked for other ways of paying what the agency said was her $43,000 tax debt, the U.S. Tax Court ruled Wednesday, saying the lawyer was offered lower payment options.”
What Day is it?
Its National Lighthouse Day! Shout out to my best friend, Marcy, who drags me to every lighthouse imaginable to see their beauty!
