Key Takeaways
- R&D hiring accelerates with OBBBA.
- CBO report on who benefits from tax bill.
- Guidance requested on new energy credit rules.
- Clashes with Treasury reportedly prompted former IRS commissioner's departure.
- OBBBA's affect on Social Security.
- Calls to improve adoption credit messaging.
- World Calligraphy Day!
OBBBA
No More Offshore. Startups Look to Spend and Hire in U.S. Due to Trump Tax Change - Meg Tanaka & Theo Francis, Wall Street Journal:
Part of President Trump’s “one big beautiful bill,” the provision lets companies speed up tax deductions for spending on research and development starting this year. They can take the deductions in the same year as the expense—but only for U.S. spending. U.S. tax deductions for foreign spending, where salaries and other costs are often lower, must be spread over 15 years.
...
Five weeks into the third quarter, job ads for R&D-related positions had already reached two-thirds the level they did for the full quarter last year, according to data from online hiring platform ZipRecruiter. The increase started to accelerate in the second quarter as the tax bill took shape, and it follows two years of sharp declines.
...
Five weeks into the third quarter, job ads for R&D-related positions had already reached two-thirds the level they did for the full quarter last year, according to data from online hiring platform ZipRecruiter. The increase started to accelerate in the second quarter as the tax bill took shape, and it follows two years of sharp declines.
Groups Anxious About Potential Dodging of New Energy Credit Rules - Tax Analysts, Tax Notes ($):
Over a dozen groups have urged Treasury to revise IRS guidance to align with newly enacted federal energy tax policies, particularly concerning the enforcement of new “beginning of construction” standards and the elimination of broad safe harbors that could enable circumvention of the statutory termination dates for wind and solar tax credits.
From the letter:
The OBBBA represents a significant shift in federal energy tax policy, particularly regarding the standards for "beginning of construction." Executive Order 14315 further emphasizes the Administration's commitment to strict enforcement of these new standards and the elimination of broad safe harbors that could enable circumvention of the statutory termination dates for wind and solar tax credits. Clear administrative guidance is essential to provide certainty to taxpayers and ensure consistent application of these new statutory requirements in accordance with both the OBBBA and Executive Order 14315.
CBO: Rich get biggest OBBB boost - Laura Weiss & John Bresnahan, Punchbowl News:
The numbers. CBO found that Americans’ resources will increase on average over the next decade thanks to the law, but the impacts vary at different income levels.
Households in the lowest 10% of income earners will see their resources decline by about $1,200 per year under the OBBB. That’s mainly due to Medicaid and SNAP cuts, CBO says.
Middle-income households will see their resources grow by an average of $800 to $1,200. But it’s the wealthiest 10% that get the biggest benefit. Those households will see resources rise by about $13,600, largely thanks to tax cuts.
Households in the lowest 10% of income earners will see their resources decline by about $1,200 per year under the OBBB. That’s mainly due to Medicaid and SNAP cuts, CBO says.
Middle-income households will see their resources grow by an average of $800 to $1,200. But it’s the wealthiest 10% that get the biggest benefit. Those households will see resources rise by about $13,600, largely thanks to tax cuts.
Related: Tune in for our free webinar, New Tax Legislation: Key Considerations for Your Business, on Tuesday, August 19th at 1:30 CST.
IRS
Billy Long’s IRS ouster follows clashes with Treasury - Brett Samuels, The Hill:
Multiple sources familiar with the matter told The Hill that leadership at the Treasury Department clashed with Long and that there were concerns within the administration that he was not a good fit to lead an agency that prides itself on implementing tax policy without getting caught up in partisan drama.
But his exit also means the IRS will have its seventh commissioner of the calendar year, with Treasury Secretary Scott Bessent taking over on an interim basis.
...
One incident in particular was viewed as the final straw when Long last month said at a conference that tax filing season would start in February next year, a change from the typical starting point of January.
But his exit also means the IRS will have its seventh commissioner of the calendar year, with Treasury Secretary Scott Bessent taking over on an interim basis.
...
One incident in particular was viewed as the final straw when Long last month said at a conference that tax filing season would start in February next year, a change from the typical starting point of January.
In the lawsuit, a D.C. federal judge initially ruled that the IRS cannot share return data for civil reasons but that the agency can do so for criminal investigations under Internal Revenue Code Section 6103. The IRS and ICE invoked the statute's criminal exception in an April memorandum of understanding to justify their interagency sharing of taxpayer information.
Social Security
How The 2025 Budget Act Accelerates Social Security’s Insolvency - Howard Gleckman, Tax Policy Center:
The budget law reduces trust fund income because it reduces taxable income, pushes some people into lower tax brackets, and lowers marginal tax rates. Several provisions lower the tax rate on benefits.
...
Combined, these provisions reduce the tax on Social Security benefits. In the short run, that helps some older adults, especially those making between about $80,000 and $130,000 annually. But in the long run, it could be very bad for Social Security recipients, both the 55 million getting benefits today and those working-age people who hope to receive promised benefits when they reach old age.
...
Combined, these provisions reduce the tax on Social Security benefits. In the short run, that helps some older adults, especially those making between about $80,000 and $130,000 annually. But in the long run, it could be very bad for Social Security recipients, both the 55 million getting benefits today and those working-age people who hope to receive promised benefits when they reach old age.
Blogs and Bits
The IRS Identity Protection PINs, also referred to as IP PINs, are a critical defense tool against identity thieves. The IRS encourages all tax pros and taxpayers to establish an IRS Online Account that allows secure access to IRS account information online. This account also guards against fraudsters from attempting to create accounts on their behalf.
Retire Richer: 7 Tax‑Smart Moves Wealthy Retirees Are Making Right Now - Miranda Marquit, Wall Street Journal. "Another way to manage your RMDs is to use qualified charitable distributions (QCDs). You donate directly to a charity from your traditional IRA, and it counts toward your RMD, but you’re not taxed on the donation."
Disguised Sales and Sham Partnerships: A Comprehensive Review of PICCIRC, LLC v. Commissioner - Ed Zollars, Current Federal Tax Developments:
The Second Circuit’s affirmation solidifies the Tax Court’s stance, providing further judicial precedent on how these complex tax avoidance schemes are analyzed and ultimately dismantled. Professionals advising on distressed asset investments or complex partnership structures must ensure that transactions possess true economic substance and a legitimate business purpose beyond tax benefits to withstand judicial review.
Tax Trouble
Farmington man sentenced to imprisonment after embezzling approximately $1.7 million from his small business employer - IRS (defendant name omitted):
According to court documents and statements made at Defendant’s change of plea and sentencing hearings, beginning in 2021 and continuing until October 2024, Defendant defrauded his employer to obtain money and property by stealing and lying. As part of Defendant's scheme, he fraudulently opened a sales channel through a popular online marketplace and used his employment credentials to access the vendor portal and redirect Automated Clearing House payments to his personal bank account. Defendant then made payments back to his employer using his personal credit card.
Related: Eide Bailly Fraud & Forensic Advisory Services.
What day is it?
It's World Calligraphy Day!
