Tax News & Views Pecans and Tax Prep

Immigrants Are Scared to File Taxes. It Could Cost the U.S. Billions. - Miriam Jordan and Andrew Duehren, The New York Times:

The fallout from the I.R.S. agreement with Immigration and Customs Enforcement is becoming clearer as the annual tax deadline nears, according to several organizations that assist immigrants with filing their tax returns.

At the Koreatown Youth and Community Center in Los Angeles, certified volunteers help low-income residents prepare returns through a partnership with the I.R.S. Undocumented immigrants file using an Individual Taxpayer Identification Number, or ITIN, a nine-digit identifier issued by the I.R.S. for people who don’t have Social Security numbers.

This year, only 10 percent of clients at the Koreatown center’s free tax clinics have been ITIN holders, compared with about a third in previous years, said Audrey Casillas, a director.

Taxes on $1 Million: Why a Banker Will Pay More Than a Plumber - Ben Steverman, Bloomberg Tax ($):

Not all millionaires are created equal — at least according to the IRS.

These days the biggest factor determining what high earners owe the government is how they make their money. And, for the rich and middle class alike, salaried professionals tend to pay far higher rates than other Americans with equivalent incomes.

Congress In Action

Looks like we may not have a Big Beautiful Repeat, as Congress looks to keep their funding bill short and tax-free.

GOP leaders prepare to steamroll opponents of DHS funding plan - Jordain Carney, Politico:

Typically reconciliation bills include at least some attempt to offset new spending with other savings or revenue. But GOP leaders are ready to argue that won’t be necessary in this instance since it involves funding that would have gone through the appropriations process — had Democrats not insisted on enforcement policy restrictions after federal agents shot and killed two Minneapolis residents in January.

Thune also warned Monday that expanding the bill by instructing additional committees — such as the Finance panel, which deals with taxes and federal health programs — would expose Republican senators to politically tough votes that could threaten the overall package. Any amendment that is germane to a reconciliation bill and under the jurisdiction of the instructed committees is eligible for a simple-majority vote — and the minority party aims to use those “vote-a-ramas” to put the majority on the spot.

But if need be, one senator has a possible source of new tax revenue.

Senate Bill Targets Tax Abuse of Life Insurance Policies - Tyrah Burris, Tax Notes ($):

The Protecting Proper Life Insurance from Abuse Act, introduced April 13 by Senate Finance Committee ranking member Ron Wyden, D-Ore., would change the treatment of PPLI policies to consider them “private placement contracts,” separating them from traditional life insurance policies.

The legislation follows an 18-month Finance Committee investigation ending in February 2024 that found that the PPLI industry is a tax shelter made up of at least $40 billion in policies held by a few thousand high-net-worth individuals.

Big Beautiful Bill News

Trump's auto-loan interest break off to sluggish start - Brian Faler, Politico:

Republicans billed the deduction as relief for Americans struggling with car payments as well as an incentive for automakers to come back to the U.S., and Trump is going on the road this week to promote it and other new deductions for tips, overtime and seniors.

But the car incentive is proving less popular than Trump’s other breaks, with many in the industry saying it’s too small to make much difference to car buyers, and comes with so many restrictions that most aren’t eligible. That means Republicans will likely get little political juice out of the provision ahead of Wednesday’s tax-filing deadline and heading into a tough midterm election cycle.

What Commenters Want in the Material Assistance Rules - Marie Sapirie, Tax Notes ($):

Where are the rules on prohibited foreign entities? That’s the question bubbling beneath the surface — and sometimes coming right to the top — of many of the comment letters in response to Notice 2026-15, 2026-11 IRB 658. The notice primarily addresses the calculation of the material assistance cost ratio.

The notable omission from Notice 2026-15 — focused on by multiple comment letters — was guidance on the prohibited foreign entity portions of the One Big Beautiful Bill Act. The foreign-influenced rules are “getting to be problematic. We’re starting to see certain financial institutions question participation in certain deals due to uncertainty about the application of the rules,” said David Burton of Norton Rose Fulbright US LLP.

See more about the new rules on prohibited foreign entities and energy tax credits here, and visit the Eide Bailly OBBBA page here.

Personnel News

Trump Taps Pimco's Browne for International Affairs Job - Daniel Flatley, Bloomberg Tax ($):

President Donald Trump intends to nominate Erin Browne to serve as the Treasury Department’s under secretary for international affairs, a move that would fill a key role at the department, according to a statement Monday from Treasury Secretary Scott Bessent.

Browne currently works as a managing director and portfolio manager for Pacific Investment Management Co. in its Newport Beach, California, office, where she leads asset allocation strategies, according to the statement.

State Tax News

Minnesota Weighs First-in-National Tax on Wealth Above $10 Million - Michael Bologna, Bloomberg Tax ($):

The bill was added last week to a list of revenue proposals for consideration in the House Tax Committee’s end-of-session omnibus tax bill. The measure is an effort to modernize the state tax code and respond to emerging methods for wealth creation and retention, sponsor Rep. Aisha Gomez (D) said.

“The government taxes the unrealized gains that happen with people’s real property each year,” Gomez, co-chair of the committee, said in an interview. “But we don’t have similar revenue tools to match the way wealth has accrued over the last three decades, especially when you think about the increased financialization of our economy. So we need to modernize our tools for raising revenue.”

Unwatched: How State Audit Selection Systems Bypass Oversight - Paul Jones and Emily Hollingsworth, Tax Notes ($):

When California’s Franchise Tax Board wanted to shrink the state’s tax gap, it acquired artificial intelligence to help select tax returns for audit.

The agency implemented an automated technology known as machine learning as part of an IT upgrade project. Machine learning — a type of AI that involves training models on data to make decisions or predictions about new data — can make tax collection systems more efficient.

But experts say AI employed in automated systems used by state tax agencies to help with audit selection can present risks, including bias, if not carefully monitored and reviewed.

Blogs and Bits

Tax Season Bingo - University of Illinois Tax School Blog. "Whether you hit every deadline or ran on caffeine and determination, you probably experienced a few of these classic April moments."

The 2026 tax filing season has had serious problems--and more tax administration challenges are on the horizon - NYU Tax Law Center Blog. "Challenges include alarm bells about possible tax scams, potential over-claiming of the new tax break on overtime income, difficulty phasing out paper refund checks, declining audit rates among top earners, and hollowing out of the IRS."

American Compass's "Tariff Tally" Doesn't Add Up - The Tax Foundation Tax Policy Blog. "The evidence overall paints a far different picture than American Compass presents, and a consistent theoretical framework undercuts its assertions of how tariffs should be expected to impact the economy moving forward."

What day is it?

It's National Pecan Day! They say that nothing is more American than apple pie, but pecans are the native nut. So proudly partake in some pecan pie.

Tax News & Views Pecans and Tax Prep

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Alex Parker