Key Takeaways
- OECD
- Tariffs
- IRS
- Disregarded Payment Losses
- OBBBA Passage
- Department of Treasury
- Retirement
- In the Courts
- Spumoni Day
OECD
OECD Proposes Changes to Global Tax Deal to Appease US – Saim Saeed & Lauren Vella, Bloomberg ($):
The 30-page draft proposal dated Aug. 13 attempts to follow through on a Group of Seven understanding that would ensure US companies aren’t subject to key enforcement measures of the minimum tax, also known as Pillar Two of the OECD-led tax deal that’s in force across the EU, the UK, Australia, Canada, Japan, Korea, and other countries, according to documents seen by Bloomberg Tax.
The document details how companies could be exempt from the global minimum tax agreement if their “profits are already subject to robust taxation.” Some of the fundamental features of the minimum tax agreement wouldn’t apply to those companies.
Tariffs
Trump’s America First Tariffs Gives Puerto Rico a Surprise Lift – Jim Wyss, Bloomberg ($):
Drugmaker Millicent Pharma on Wednesday will announce plans to begin production in Fajardo, on Puerto Rico’s eastern coast. At least seven manufacturers have either set up shop or expanded their operations in the US territory since Trump took office and rolled out tariffs on foreign goods, according to government data.
American Businesses in ‘Survival Mode’ as Trump Tariffs Pile Up – Daisuke Wakabayashi, New York Times:
But the pause has done nothing for many American small-business owners paying the tariffs it left in place, such as a minimum 30 percent duty for goods from China or a 50 percent import tax on products made from foreign steel and aluminum. The average effective U.S. tariff rate soared to 18.6 percent in early August, the highest level in more than 90 years, from 2.5 percent when Mr. Trump took office in January, according to the Budget Lab at Yale, a research center.
Many businesses stockpiled key supplies and components ahead of the tariffs, but the full effect of the import taxes is becoming more apparent as those reserves dwindle, dealing a final blow to some companies already struggling with other challenges.
IRS
Leadership Void Leaves Tax Practitioners Blind to IRS Priorities – Erin Schilling & Michael Rapoport, Bloomberg ($):
The top ranks at the IRS are riddled with vacancies and temporary leaders: Billy Long was removed as commissioner earlier this month, replaced by Treasury Secretary Scott Bessent on an acting basis, and five high-level officials have been placed on administrative leave in the past few weeks.
Acting or Vacant: The New Status Quo for Leadership Roles at IRS – Erin Slowey, Bloomberg ($):
Roughly 30 jobs make up the top brass organizational chart at the agency. Of those, nine are vacant and 11 are filled by employees in an acting capacity—chief among them the IRS commissioner, now on its seventh leader with Treasury Secretary Scott Bessent. He took over after President Donald Trump ousted his own pick for the top job, Billy Long, last week.
Disregarded Payment Losses
Treasury Backtracks on Controversial Disregarded Payment Rules – Michael Smith, Tax Notes ($):
In Notice 2025-44, released August 19, the IRS and Treasury announced that they plan to withdraw the final DPL rules and extend transitional dual consolidated loss (DCL) relief related to the OECD global anti-base-erosion rules. The final DPL rules (T.D. 10026), released January 10, contained slight modifications to the proposed regulations (REG-105128-23) issued on August 6, 2024.
Treasury Plans to Withdraw Disregarded Payment Loss Rules – Lauren Vella & Michael Rapoport, Bloomberg ($):
The agencies said in Notice 2025-44, issued Wednesday, that their proposal will also extend the temporary relief provided to corporate taxpayers who are subject to final regulations detailing how the 15% global minimum tax rules and the US’ dual consolidated loss rules mesh.
IRS To Nix Recent Rules on Disregarded Foreign Payments – Kevin Pinner, Law 360 ($):
The Internal Revenue Service proposes rolling back disregarded payment loss, or DPL, rules issued in mid-January, as well as related changes to the dual consolidated loss, or DCL, rules, and extending a transitional arrangement for the DCL rules' interaction with the 15% global minimum tax, according to a notice.
OBBBA Passage
Campaign Cash Surged for House Taxwriters as OBBBA Advanced – Doug Sword, Tax Notes ($):
…
The average haul of $1.02 million per member was 29 percent more than the $787,024 average that committee Republicans reported during the first six months of the 2023-2024 election cycle when control of Congress was divided and major tax legislation was not expected.
Department of Treasury
Treasury Names Jim Wang Acting International Tax Counsel – Michael Rapoport & Lauren Vella, Bloomberg ($):
...
Wang has been Treasury’s deputy international tax counsel since 2023. Before that, he was an attorney-adviser in Treasury’s Office of Tax Policy and an associate at Jones Day law firm.
Retirement
How to Maximize a Roth IRA: Your Tax-Free Guide to Retiring Rich – Suzanne Woolley, Bloomberg ($):
The enduring appeal of a Roth retirement account lies in its simple premise: pay taxes today to avoid them tomorrow. Contributions are made with after-tax dollars, on which earnings grow tax-free. With US income tax rates near historical lows, a Roth is a hedge against the possibility of higher taxes in the future, and the accounts provide flexibility in controlling one’s tax bracket down the line, said Craig Toberman of Toberman Becker Wealth.
In the Courts
Fla. Man Who Evaded $7M In Federal Taxes Gets Probation – David Minsky, Law 360 ($). “A Florida investor who admitted to cheating the Internal Revenue Service out of $7 million in taxes was sentenced Wednesday to probation after telling a federal judge he suffers from serious health issues, including Stage 4 kidney cancer and early-onset dementia.”
Artist Can Proceed with Microcaptive Challenge in Tax Court – Tristan Navera, Bloomberg ($). “Renowned artist Sterling Ruby will be able to litigate a $900,000 tax dispute over the legitimacy of his microcaptive insurer in the US Tax Court because the IRS notice of deficiency was valid.”
What Day is it?
Grab a slice! You don’t have to be Italian to celebrate National Spumoni Day! “National Spumoni Day is celebrated on August 21 every year to honor the Italian ice cream treat that incorporates cream, fruit, and nuts. On National Spumoni Day (and in general), scooping spumoni is considered bad taste, and it’s vital to slice it.”
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