Key Takeaways
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Acting IRS Large Business Unit head bails out.
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Former IRS privacy officer says "illegal" ICE data sharing led to resignation.
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Some coaches, teachers get new deduction.
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Doubts on a second reconciliation bill.
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Deere hit by tariffs, farmer struggles.
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The market for factoring tariff refunds claims.
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Watching out for investment scams.
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Cheese Pizza Day, 401(k) Day.
Mark your calendars for next Tuesday for "New Tax Legislation: Impacts on Section 1202 Qualified Small Business Stock," an Eide Bailly webinar. September 9, 11:00 a.m. Central time, no charge, 1 hour CPE available. Register here.
Acting IRS Large Business Unit Head Becomes Latest to Depart - Erin Slowey and Erin Schilling, Bloomberg ($):
Jennifer Best, the acting IRS commissioner of the Large Business and International Division, will leave the agency Friday, according to an email seen by Bloomberg Tax. She will be replaced by Mabeline Baldwin, who will also continue her permanent job as director of the eastern compliance practice area.
Best took over the position after Holly Paz, a longtime IRS executive was put on administrative leave in July for for unspecified, alleged conduct against Republicans.
The article notes that over half of the top 30 positions in IRS are either vacant or run by an "acting" head. The IRS Commissioner post is currently held in an acting capacity by Treasury Secretary Bessent.
Former IRS Executive Calls Immigrant Tax Data Deal ‘Illegal’ - Peyton Rhodes and Benjamin Valdez, Tax Notes ($):
Former IRS Chief Privacy Officer Kathleen Walters, in an interview with Tax Notes August 27, said the agency’s chief counsel attorney who reviewed DHS’s initial data request told executives that the request didn’t meet the legal guidelines the IRS follows for sharing taxpayer data.
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Walters, one of a string of leaders who have departed the agency this year, stepped down in April after she became aware that Treasury was set to sign a memorandum of understanding with DHS.
Trump Administration Reposts Treasury, IRS Regulatory Agenda - Erin Slowey and Naomi Jagoda, Bloomberg ($):
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In tandem with the agenda, the IRS typically will release its priority guidance plan, which isn’t public yet. That includes a more expansive look at the agency’s regulatory direction listing regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance.
The agenda includes proposed rules on clean energy credits, disguised sales of partnership interests, and partnership-level treatment of partnership interest options.
IRS to Close Nine Taxpayer Assistance Centers - Benjamin Valdez, Tax Notes ($). "According to a memo that the IRS sent to lawmakers, centers in the following locations will be closed: Altoona, Pennsylvania; Wilkes-Barre, Pennsylvania; Cedar Rapids, Iowa; Elmira, New York; West Nyack, New York; Owensboro, Kentucky; Paducah, Kentucky; Walnut Creek, California; and Wheeling, West Virginia."
OBBBA Nuggets
A Win for (Some) Teachers and Coaches in the New Tax Law - Ashlea Ebeling, Wall Street Journal:
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The new benefit will only be available for educators who itemize their deductions. For expenses starting on Jan. 1, those educators will be able to deduct unlimited classroom expenses beyond the $300 they already get.
One example: Teachers who have $1,200 in qualifying expenses in 2026 could first take the $300 deduction, which lowers their adjusted gross income and potentially increases their eligibility for other tax breaks. Then they could itemize the remaining $900 in expenses.
Podcasters and influencers: The unexpected jobs covered under Trump’s ‘no tax on tips’ plan - Fatima Hussein, Associated Press:
A bit more unexpected? Podcasters and social media influencers will also be excluded from forking over a portion of their tips, according to the list released Tuesday by the Treasury Department.
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Only tips reported to the employer and noted on a worker’s W-2, their end-of-year tax summary, will qualify. Payroll taxes, which pay for Social Security and Medicare, would still be collected along with state and local taxes.
How the Megabill Boosts a Charitable Tax Break for Seniors - Laura Saunders, Wall Street Journal:
Starting this year, IRA owners who donate via QCDs could reap greater benefits from megabill provisions such as expanded state and local tax deductions or the new $6,000 senior deduction, among others. Next year they’ll also avoid cuts to “itemized” charitable deductions on Schedule A.
An added bonus is that the Internal Revenue Service recently issued rules that could simplify tax reporting for these donations, which has caused trouble for many givers. Donors can start reaping the benefits of QCDs at age 70 ½.
One Big Beautiful Bill Act’s Corporate Tax Changes Benefit US Manufacturing the Most - Garrett Watson, Tax Policy Blog. "As measured by the change in tax liability in 2026 and over the budget window, the OBBBA provides the biggest benefit to corporations in manufacturing and less to those in service industries."
2 Big 2 Beautiful Bill 2?
Plans for second GOP megabill face growing skepticism - Meredith Lee Hill and Jordain Carney, Politico:
Those proposals are due by the end of this week, and Johnson and other top Republicans are expected to kick off a process to circulate and evaluate them across the conference. But after the fight for President Donald Trump’s “big, beautiful bill” sparked intense policy fights among GOP factions, there’s a growing realization the party likely can’t pass a new package before the end of the year — if at all — according to interviews with more than a dozen House and Senate Republicans.
Reconciliation 2.0: Fix or Fiasco? - Adam Michel and Dominik Lett, The Debt Dispatch. "If it becomes a Christmas tree of new spending and special-interest deals, it will be a fiasco."
Tariffs, My Deere, Tariffs.
John Deere, a U.S. Icon, Is Undermined by Tariffs and Struggling Farmers - Kevin Draper, New York Times:
Trump Signs Order Sealing Japan Tariff Deal With 15% Rate - Josh Wingrove, Hadriana Lowenkron, Skylar Woodhouse, and Yoshiaki Nohara, Bloomberg via MSN. "Trump’s directive prevents the stacking of Trump’s country-specific duties on top of existing levies. The 15% charge will apply retroactively to most products shipped starting Aug. 7, the date on which the US president’s escalated tariffs on dozens of trading partners took effect."
Wall Street’s Bet Against the Trump Tariffs - Andrew Ross Sorkin, et. al, New York Times Dealbook:
“We have a lot of clients asking about it,” Lenny Feldman, a managing partner of Sandler, Travis & Rosenberg, a law firm specializing in international trade, told DealBook. (His firm is not involved in such transactions.)
For importers, selling refund rights is a potential way to cushion tariff losses, even if some offers have been valued at pennies on the dollar. DealBook hears that large U.S. companies are among those weighing such proposals.
Blogs and Bits
Claim these clean energy credits before OBBB ends them - Kay Bell, Don't Mess With Taxes. "But EV tax breaks aren’t the only climate-change related laws being eliminated sooner than originally planned."
IRS FAQs Clarify Early Terminations of Clean Energy Credits - Parker Tax Pro Library. "The FAQs provide guidance on the expiration of these credits and deductions and provide clarification on the availability of the new clean vehicle credit, the energy efficient home improvement credit, and the residential clean energy credit, among others."
Related: The Impact of New Tax Legislation on Energy Efficiency Incentives
OB3 Act: Research Expense Guidance is Released - Thomas Gorczynski, Tom Talks Taxes. "New §174A applies to expenses paid or incurred in tax years beginning after December 31, 2024; however, transition rules provide many options (and planning opportunities)."
Related: Congress Approves Expensing Fix for R&D Costs Under New Tax Bill
State Tax News & Views: Results of Colorado's Special Legislative Session - Melissa Menter and Colette Sutton, Eide Bailly. Many state tax items, including this on Washington State:
Investment Scam Fraud Watch(es)
Man indicted on federal fraud and tax charges for allegedly defrauding individuals out of $2.6 million and evading income taxes - IRS (Defendant name omitted, emphasis added):
It's always cars and watches.
The tax charges accuse Defendant of attempting to evade income taxes and willfully failing to file income taxes for the calendar years 2020 through 2023.
Thoughts:
- Somehow that didn't end up on his tax return?
- $2.45 million is a pretty big investment in a non-public business for one individual. It would seem the investor might have profitably spent more on due diligence here.
- Signing a lease on a house is a strange way to get your investment money back.
Be careful out there.
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