Tax News & Views Creativity and Taxes Roundup

TAS Portal Proving Effective for Congressional Constituent Cases - Cady Stanton, Tax Notes ($):

A new casework management portal from the Taxpayer Advocate Service has helped streamline constituent tax cases for congressional offices, improving communication and inquiry responses, staff reported.

Some congressional taxwriting offices told Tax Notes their constituent services staff have heard from taxpayers this filing season about challenges getting a live IRS representative on the phone and delays in refund disbursement. But many offices also reported improvements in their ability to manage and resolve constituent tax cases because of a new online system that TAS rolled out in recent months.

TAS, which directly fields constituent cases from congressional offices, launched an optional online portal in partnership with the IRS for fiscal 2026 that enables offices to submit requests for assistance.

Little-Known Gambling Tax Could Upend Boom In US Betting - Stephen K. Cooper, Law360 Tax Authority:

After a record year for U.S. commercial gaming, a little-known tax on phantom income in last year's Republican reconciliation law has spurred bipartisan repeal efforts amid concerns it could alter betting behavior and drain state and local economies built on gambling-related tourism.

The unexpected change to U.S. gambling loss deductions came as wagering is expected to surge around events such as the recent Super Bowl and NCAA men's basketball tournament and the upcoming NBA Finals and Kentucky Derby. Accountants and lawmakers warn that the new gambling tax could shift betting toward less traceable cash wagers and push high-stakes international players to jurisdictions with more favorable tax rules.

Taxes After the Fire

Wildfire survivors who lost their homes could face another blow from taxes on settlement payouts - Gabriela Aoun Angueira, Associated Press:

Thousands of survivors of the 2025 Eaton Fire in Altadena, California, have elected to accept an upfront settlement from the utility accused of causing it, forgoing future litigation for a faster payment that could help them rebuild or relocate.

But unless a bill moving through Congress becomes law, that money could be taxed as income, taking big bites out of their payments and possibly disqualifying them from other government benefits.

“There was this terrifying disbelief,” Bree Jensen, communications director for the Eaton Fire Long-Term Recovery Group, said of informing fellow residents about the tax.

Don't Hold Your Breath Waiting for Refunds

Tariff Refunds Start Today--But Average Consumers Won't Benefit - Ty Roush, Forbes:

Only an importer of record—the entity that officially paid the tariffs—can request refunds, though some legal analysts have criticized the process as only a few businesses publicly committed to sharing the proceeds, and many firms would benefit from the refunds despite asking consumers to pay higher prices brought on by the tariffs.

See here for more information about the tariff refund process.

International News

EU Will Limit Data Disclosure to Advance VAT Anti-Fraud Bill - Saim Saeed, Bloomberg Tax ($):

EU countries are poised to approve a bill giving the bloc’s anti-fraud agencies access to tax data after amendments were added to ensure privacy rules.

The amended text, dated April 17 and seen by Bloomberg, would limit the agencies’ access to “targeted searches on a case-by-case basis” and prohibit them from conducting broad and overly demanding searches.

The bill would give the EU’s anti-fraud office, known as OLAF, and the European Public Prosecutor’s Office, or EPPO, access to value-added tax information to conduct investigations.

Pillar 2 Is Not There to 'Fill Our Pockets,' EU Official Says - Elodie Lamer, Tax Notes ($):

Angel said one has to remember that the primary goal behind pillar 2 is “not to fill our pockets, but to level the playing field and to ensure that there is a floor to the race to the bottom in corporate income tax.” The side-by-side deal was concluded because the minimum tax rules of the United States ensure a comparable level of protection.

In the same vein, it will take some time before the EU has figures that allow any solid examination of the impact of pillar 2 on competitiveness, Angel said. The commission intends to start the work on this assessment around the end of 2027, with a view to communicating it to member states sometime in 2028, he said.

‘Friendly Collection’: Brazil’s Plan to Reduce Taxpayer Mistrust - Barbara Mengardo, Tax Notes ($):

As the Brazilian government adopts a “friendly collection” strategy to improve the relationship between taxpayers and the administration, its revenue service seeks to reverse the country's historical resistance to paying taxes through compliance programs.

Identifying compliance programs as the agency's top priority for 2026, Brazilian Federal Revenue Service (RFB) Special Secretary Robinson Barreirinhas outlined the rationale during a press conference in January.

“2026 will be a year of a definitive shift in paradigm and in the Brazilian Federal Revenue Service’s approach," Barreirinhas said, adding that the institution "will completely abandon the outdated stance of a reactive and punitive tax authority and move toward a new Federal Revenue Service that anticipates issues with taxpayers, provides guidance, and prevents litigation.”

State Trigger Warning

States Rethink Income Tax Cuts as Triggers Fail to Guard Budgets - Daniel Moore, Bloomberg Tax ($):

The debate shows how quickly fortunes have turned for some state budgets due to steep cuts to federal aid and a drop of pandemic-era funding that led some states to issue generous tax breaks. Personal income taxes are the largest revenue source for state budgets, with sales taxes and corporate income taxes, and other smaller revenue sources rounding them out, according to the National Conference on State Legislatures.

Some states have failed to hit their triggers. Kentucky launched an income tax phaseout in 2022 with budget reserve and revenue growth triggers that prevented tax cuts from taking effect this year. Kansas’ 2025 tax cuts depend on similar reserve margins and revenue growth targets—thresholds the state hasn’t yet met.

IRS Under the Knife

More IRS Budget Slashing is Short-Sighted and Doomed to Fail - Steve Ellis (Taxpayers for Common Sense), Bloomberg Tax:

The president’s budget proposal would weaken the IRS. Congress has already cut the agency’s funding from $12.3 billion in FY25 to $11.2 billion in FY26. Now Trump wants to cut by another $1.4 billion in FY27 to $9.8 billion—with reductions to enforcement, technology, and operations support, and a small boost to taxpayer services.

This proposal is the latest skirmish in an apparent campaign to hamstring the IRS’s ability to enforce tax laws. The Inflation Reduction Act of 2022 pumped nearly $80 billion into the agency to update woefully outdated technology and help with retention and enforcement. In the succeeding years, that money has been repeatedly slashed by a total of $53.5 billion leaving the IRS with roughly $10 billion remaining.

Blogs and Bits

Americans are Moving to States with Lower Taxes and Sound Tax Structures - Abir Mandal, The Tax Foundation. "While job opportunities, housing affordability, climate, and family connections remain significant drivers of mobility, tax burdens and the broader fiscal environment continue to play a substantial role in shaping decisions."

While States Debate New Trump Tax Changes, Equity Must Be At Core - Brakeyshia Samms, Institute on Taxation and Economic Policy. "The newly enacted provisions that states are considering incorporating into their own tax codes have profound implications for economic and racial equity."

Early tax holiday season in Missouri and Texas - Kay Bell, Don't Mess With Taxes. "Plants take advantage of the warmer temperatures to rebound from winter hibernation. And a couple of tax holidays also make an early appearance."

What day is it?

It's World Creativity and Innovation Day! A good day to celebrate new ideas.