Tax News & Views Lobster Shutdown with Fat Bears Roundup

Government Shutdown

Tax Regulation Writing Could Slow Down in a Shutdown – Doug Sword & Benjamin Valdez, Tax Notes ($):

Growing prospects for a partial shutdown of the IRS beginning October 1 are making tax professionals and their clients nervous about possible regulatory delays, particularly when it comes to issuing guidance for this summer’s giant tax bill.

The lack of a shutdown plan detailing how many IRS employees would be furloughed, how many would stay on the job, and what they would work on adds to the uncertainty, tax watchers told Tax Notes. It is common, however, for agency shutdown plans to pour in during the final days before federal funding dries up September 30 at midnight.

The One Big Beautiful Bill Act (P.L. 119-21) contained $12.5 trillion in tax provisions, and clients eagerly await further guidance or rules on an array of issues, particularly section 174 research expensing, reporting for overtime and tips deductions, and foreign entity of concern for purposes of the energy tax credits, Dustin Stamper of BDO USA PC said.

Jeffries Says Democrats Will Not Compromise on ACA Tax Credits – Erin Durkin, Bloomberg ($):

House Minority Leader Hakeem Jeffries said Democrats will not compromise on their call for making enhanced Obamacare premium tax credits permanent.

When asked during an exclusive Bloomberg Government roundtable what a potential compromise could look like on the subsidies, Jeffries pointed to the Democrats’ continuing resolution proposal that would permanently extend the more generous version of the Affordable Care Act premium tax credit — a policy that would cost the US government around $350 billion over 10 years.

Global Minimum Tax Framework

US Companies Raise Alarms as Global Tax Deal Rewrite Drags On – Lauren Vella & Zach C. Cohen, Bloomberg ($):

US multinational companies are telling Congress members and the Trump administration that negotiations at the OECD to rewrite major parts of the global minimum tax framework are going too slow.

As a group of about 140 countries crawl through negotiations, US corporations are worried they’ll have to invest millions to comply with the tax, known as Pillar Two, if a deal exempting them from parts of the framework isn’t reached by year’s end.

Trump Accounts

Lack of Upside Could Hobble Employer Buy-In on Trump Accounts – Trevor Sikes, Tax Notes ($):

Employers might not be encouraged to offer recently established Trump accounts as an employee benefit without further reassurances from the government regarding their apparent risks and lack of tax incentives, observers say.

Trump accounts enacted in the One Big Beautiful Bill Act (P.L. 119-21) reflect President Trump’s focus on offering Americans an alternative tax-favored saving vehicle. In an August 2025 report, the Council of Economic Advisers said the accounts “give the next generation a jump start on saving.”

Tariffs

Wall Street bets against Trump on tariff refunds, while importers suffer – David J. Lynch, Washington Post:

Wall Street investors are buying up claims to potential tariff refunds, betting that the Supreme Court will strike down President Donald Trump’s signature economic policy and require the government to disgorge tens of billions of dollars that companies have paid this year in import taxes.

A handful of hedge funds and specialized investment firms are offering importers around 20 cents for every dollar they paid in Trump’s “reciprocal” tariffs and roughly 5 cents per dollar for levies on Canadian, Mexican or Chinese goods stemming from the president’s ire over fentanyl trafficking, according to Salvatore Stile, founder of Alba Wheels Up International, a New York-based customs broker. The antidrug tariff claims are worth less because they are seen as more likely to survive legal challenges and thus less likely to produce refunds.

Nonprofits Urge SCOTUS to Side With Trump Admin in Tariff Dispute – Cameron Browne, Tax Notes ($). “Three nonprofits are arguing for the U.S. Supreme Court to preserve the Trump administration’s challenged tariffs because President Trump had the authority to impose the tariffs under the International Emergency Economic Powers Act (IEEPA) and the Tariff Act of 1930.”

Federal Workers

IRS Extends Deferred Resignation Offer to Workers on Admin Leave – Erin Slowey, Bloomberg ($):

IRS employees who are on administrative leave once again have been given the option to take a deferred resignation offer, according to two people familiar with the situation.

Those select employees were given until Sept. 22 to accept President Donald Trump’s third deferred resignation offer where they would continue their status on paid administrative leave but would exit the agency permanently Dec. 31, the two people said. It is unclear how many were given the offer and how many have accepted.

Trump HR Chief Says Resignations Cut Too Deep for Some Agencies – Ian Kullgren, Bloomberg ($):

The Trump administration’s offer to let employees stay on paid leave before resigning at the end of September resulted in key federal workers leaving the government, causing some agencies to backpedal, President Donald Trump’s top human resources officer told Bloomberg Law.

“There may be some critical area or organizational area where they feel like, ‘ok, maybe, you know, we kind of cut this one too close to the bone,” Scott Kupor, director of the White House Office of Personnel Management, said in an interview.

Solar Credits

Solar tax credits are ending. Here’s why that could be good for solar. – Michael J. Coren, Washington Post:

Like Cinderella rushing home from the ball, Americans are racing to buy solar panels before the clock strikes midnight.

On Dec. 31, a generous federal rooftop solar tax credit will expire thanks to the One Big Beautiful Bill signed by President Donald Trump in July. The credits, worth about $8,000 on average last year, have helped U.S. homeowners install thousands of megawatts of solar panels.

Medicaid

Court Sides with Texas, Nixes Medicaid Tax Funding Rule – Anna Scott Farrell, Law 360 ($):

The federal government improperly expanded a Medicaid funding restriction to private parties that was meant only to govern the use of state taxes to fund the health insurance program, a Texas federal court ruled Wednesday in vacating guidance from the Centers for Medicare & Medicaid Services.

While CMS claimed its guidance in a bulletin last year simply restated its longstanding interpretation of federal laws, the court sided with the state of Texas, which had argued CMS breached its authority and threatened the operation of the insurance program serving 5 million low-income people in the state.

Tip Income Exemption

Trump’s tax break on tips has a catch. Here’s what to know. – Michelle Singletary, Washington Post:

The debate over tipping is about to intensify after congressional Republicans passed President Donald Trump’s sweeping tax and immigration legislation in July, which adds a “no tax on tips” deduction to the tax code.

The deduction is capped at $25,000 per year and gradually decreases for taxpayers with a modified adjusted gross income over $150,000 ($300,000 for joint filers). It is available to both itemizers and those who take the standard deduction.

In the Courts

Circuit Vacates Tax Court Ruling on Size of Whistleblower Award – Kristen A. Parillo, Tax Notes ($). “The IRS had no reasonable grounds for refusing to award the maximum percentage to a whistleblower whose inside information on a widespread dividend tax abuse scheme led to a 2008 Senate probe, the D.C. Circuit held.”

Court Finds Promoter Penalties Don’t Deprive Right to Jury Trial – Mary Katherine Browne, Tax Notes ($). “A district court determined that the statutory framework for promoter penalties doesn’t deprive taxpayers of the right to a jury trial because district courts can review penalty assessments without deference to IRS conclusions.”

Former State Senator to Pay $2.4 Million for Tax Crimes – Trevor Sikes, Tax Notes ($). “A former state senator convicted of fraud and tax crimes failed to report income and was subject to excise taxes, resulting in tax deficiencies and penalties totaling over $2 million, the Tax Court held.”

Tax Court Finds Convicted Ex-Pa. Senator Liable for Tax – Asha Glover, Law 360 ($). “A former Pennsylvania state senator convicted of fraud is on the hook for income tax deficiencies for 2001 through 2005, plus a civil fraud penalty for each year, the U.S. Tax Court said Wednesday.”

Convicted State Senator Must Pay Excise Tax on Misused Funds – Tristan Navera, Bloomberg ($). “Former Pennsylvania State Sen. Vincent Fumo (D), who was convicted of dozens of counts of fraud, must pay millions in penalties for misuing a nonprofit to claim tax benefits.”

What Day is it?

Its National Lobster Day! Looking for a fun way to celebrate? Head up to Bar Harbor, Maine and visit the Maine Lobster Museum. Surely worth the price of admission!

Not into celebrating lobster? It is also Fat Bear Week! Celebrate by voting for the fattest bear of the year! “Some of the largest brown bears on Earth make their home at Brooks River in Katmai National Park, Alaska. Brown bears get fat to survive and Fat Bear Week is an annual tournament celebrating their success in preparation for winter hibernation.”

Tax News & Views Lobster Shutdown with Fat Bears Roundup

Make a habit of sustained success.

Trina Pinneau