Key Takeaways
- Permits for renewable energy projects.
- Changes to private school excise tax under OBBBA.
- Premium tax credits and avoiding government shutdown.
- Modernization of IRS.
- IRS to phase out paper refund checks.
- Updated per diem rates announced.
- Syndicated conservation easement in the courts.
- Bluebird of happiness day!
OBBBA
EU Eyeing Country-Level Min. Tax Exemption For US Cos. - Kevin Pinner, Law 360 Tax Authority ($):
The European Union's preferred method for accommodating the U.S. proposal to exempt American companies from the 15% global minimum tax's international provisions would be to allow a conditional safe harbor that member countries would need to enact individually, a top EU tax official told lawmakers Tuesday.
This approach would avoid changes to the EU directive on the minimum tax, under which the U.S. minimum tax system cannot be deemed equivalent because it lacks a country-by-country basis for topping up tax liabilities, said Benjamin Angel, director for direct taxation at the European Commission, the bloc's executive branch.
This approach would avoid changes to the EU directive on the minimum tax, under which the U.S. minimum tax system cannot be deemed equivalent because it lacks a country-by-country basis for topping up tax liabilities, said Benjamin Angel, director for direct taxation at the European Commission, the bloc's executive branch.
More from Capitol Hill
Trump Nixes Talks With Democrats on Avoiding Shutdown - Alexander Rifaat and Katie Lobosco, Tax Notes ($):
One of the key Democratic demands is extending the Affordable Care Act enhanced premium tax credits before they expire at the end of the year.
Schumer put forth a stopgap government funding plan that would, among other things, permanently extend the tax credits, which help people buy health insurance through the ACA exchange.
Allowing them to expire would drive up healthcare costs for millions of people.
Some moderate Republicans have expressed support for extending the credits.
Thirteen House Republicans have backed a bipartisan bill introduced September 4 that would extend the enhanced premium tax credits through 2026.
Schumer put forth a stopgap government funding plan that would, among other things, permanently extend the tax credits, which help people buy health insurance through the ACA exchange.
Allowing them to expire would drive up healthcare costs for millions of people.
Some moderate Republicans have expressed support for extending the credits.
Thirteen House Republicans have backed a bipartisan bill introduced September 4 that would extend the enhanced premium tax credits through 2026.
Congress Moves To Allow Large Corporations To Continue To Hide Tax Payments - Howard Gleckman, Tax Policy Center:
As Congress engages in its latest battle over federal spending and observers wonder whether it will lead to a government shutdown, keep your eye on policy changes buried deep in the House Appropriations Committee’s spending bill. One is a provision that effectively would allow corporations to continue to hide important details about how much they pay in taxes to federal, state, and local authorities in the US and to foreign governments.
Catch Up Contributions
High Earners Age 50 and Older Are About to Lose a Major 401(k) Tax Break - Ashlea Ebeling, Wall Street Journal:
Starting next year, the extra catch-up contributions that those workers use to stow money in their 401(k)s will have to go into their accounts after tax for high earners. The Internal Revenue Service issued final rules this month on a 2022 law, which set the threshold for a high earner at more than $145,000 in wages.
This change means many workers will pay taxes on their catch-up money upfront during high-earning years instead of in lower-earning years in retirement. The money would go into a Roth account, where it can later be withdrawn tax-free.
It is the first time the tax code is mandating Roth savings, which give the government its cut up front.
This change means many workers will pay taxes on their catch-up money upfront during high-earning years instead of in lower-earning years in retirement. The money would go into a Roth account, where it can later be withdrawn tax-free.
It is the first time the tax code is mandating Roth savings, which give the government its cut up front.
IRS
Treasury Announces Contracts to Modernize IRS - Tax Analysts, Tax Notes ($):
Treasury has extended or made contracts with several technology companies to execute plans for modernizing taxpayer services and online accounts, return processing, and data integrity at the IRS, a September 22 release said.
IRS to phase out paper tax refund checks starting with individual taxpayers - IRS:
The Internal Revenue Service, working with the U.S. Department of the Treasury, today announced that paper tax refund checks for individual taxpayers will be phased out beginning on Sept. 30, 2025, as required by Executive Order 14247, to the extent permitted by law. This marks the first step of the broader transition to electronic payments.
The IRS will publish detailed guidance for 2025 tax returns before the 2026 filing season begins. Until further notice, taxpayers should continue using existing forms and procedures, including those filing their 2024 returns on extension of a due date prior to Dec. 31, 2025.
The IRS will publish detailed guidance for 2025 tax returns before the 2026 filing season begins. Until further notice, taxpayers should continue using existing forms and procedures, including those filing their 2024 returns on extension of a due date prior to Dec. 31, 2025.
Blogs and Bits
End of EV tax credit will hit drivers in 3 states hardest - Kay Bell, Don't Mess with Taxes:
Over a year, Californians could miss out on an estimated $1.1 billion in EV tax credits when the federal incentive ends, according to the study. That includes credits for new and used electric vehicles.
Texans filed 38,870 EV tax credit claims. That produced $272.7 million in savings for those drivers.
Florida claims came to 30,090. Those filings accounted for $201.4 million in tax savings on EV purchases.
Texans filed 38,870 EV tax credit claims. That produced $272.7 million in savings for those drivers.
Florida claims came to 30,090. Those filings accounted for $201.4 million in tax savings on EV purchases.
The IRS Announces New Per Diem Rates Effective October 1, 2025 - Bailey Finney, Eide Bailly:
Under the high-low substantiation method, the federal per diem rate to be used is the “high” rate for high-cost localities and the “low” rate for all other localities. The annual high-low rate for the high-low substantiation method is $319 for travel to any high-cost locality and $225 for travel to any other locality within the continental US. This rate includes lodging, meals, and incidental expenses.
Tax Court Again Not Impressed With a Syndicated Conservation Easement Transaction - Ed Zollars, Current Federal Tax Developments:
Substantiation is Paramount: Inaccurate or incomplete baseline reports can be fatal to a deduction, especially when significant rights are reserved. Practitioners must ensure clients understand the critical importance of a meticulously prepared and accurate baseline.
...
This case reinforces the need for tax professionals to apply heightened skepticism and due diligence when advising clients on complex transactions like syndicated conservation easements. Reliance on promoters and their hand-picked experts is not a substitute for independent, objective analysis.
...
This case reinforces the need for tax professionals to apply heightened skepticism and due diligence when advising clients on complex transactions like syndicated conservation easements. Reliance on promoters and their hand-picked experts is not a substitute for independent, objective analysis.
IRS extends relief to farmers and ranchers affected by drought in 49 states, other regions - IRS:
Under the guidance, farmers and ranchers may take more time to replace their livestock and defer tax on any gains from the forced sales or exchanges.
Notice 2025-52 PDF lists the applicable areas, by county or other jurisdiction, that qualify for federal assistance. The list includes 49 states, the District of Columbia and other regions that reported exceptional, extreme or severe drought during the 12-month period ending on Aug. 31, 2025.
Notice 2025-52 PDF lists the applicable areas, by county or other jurisdiction, that qualify for federal assistance. The list includes 49 states, the District of Columbia and other regions that reported exceptional, extreme or severe drought during the 12-month period ending on Aug. 31, 2025.
Tax Trouble
Oklahoma Couple Owe Taxes On Ranch, Tax Court Says - Anna Scott Farrell, Law 360 Tax Authority ($):
Even though the couple worked on the ranch, sometimes until after dark, they never recorded a profit from the business on their income tax returns from 2008 through 2022, the court said. They also continued to experience financial losses after starting their business, reporting nearly $3 million in losses through 2022, the court said. While the couple claimed their losses were only around $600,000, the court said the couple's calculation lacked evidence.
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