Tax News & Views Blueberry Pie Roundup

House Passes Suite of Bipartisan Tax Administration Bills - Katie Lobosco and Cady Stanton, Tax Notes ($):

Despite bipartisan support for the measures, the fate of the bills is unclear in the Senate, where top taxwriters have pursued a different strategy and introduced a broader piece of legislation focused on improving taxpayer services and tax administration.

Some taxwriters had hoped to add tax provisions to a must-pass reconciliation package expected to fund immigration enforcement agencies, but Republican leaders are opting to keep that bill narrow and exclude the taxwriting committees from the process.

More on Tax Administration

ERC Claimants Get New Way To Request Time Extensions - Trevor Sikes, Tax Notes ($):

Taxpayers with unresolved employee retention credit claims now have a more streamlined method for requesting time extensions on their deadlines to file suit.

The IRS move could help both taxpayers and the government avoid a wave of litigation over the fraud-riddled and backlogged ERC program.

Taxpayers that have six months or less remaining on their statute of limitations to file suit and are still waiting for the IRS to consider their response to a disallowance letter may submit a Form 907, “Agreement to Extend the Time to Bring Suit,” through a new online tool, the IRS said in an April 27 release (IR-2026-58).

See here for more about how Eide Bailly can help with employee retention credit headaches.

Supreme Court Rejects Review of Couple's Penalty Challenge - James Matheson, Bloomberg Tax ($):

The Battats in their petition argued that a formal IRS written communication that informs a taxpayer that penalties have been determined and that solicits payment qualifies as an “initial determination.” Thus, they said, the government didn’t comply with the penalty approval requirements, and the Eleventh Circuit incorrectly upheld the penalties in their case.

The couple argued the case was the proper vehicle to settle a growing divide surrounding the interpretation of the statute on penalty approval requirements and provide guidance to similar ongoing cases.

International News

Trump pursues new import taxes to replace tariffs the Supreme Court rejected- Paul Wiseman, Associated Press:

Starting this week, the Office of the U.S. Trade Representative will begin hearings in two investigations that are expected to lead to a new round of U.S. tariffs — taxes paid by importers in the United States and usually passed on via higher prices to consumers who are already fed up with the high cost of living.

Trump’s newest tariff push is sure to face more challenges in court but is likely to prove sturdier than the one the Supreme Court tossed out.

Related: Eide Bailly Supreme Court IEEPA ruling factsheet and refund process explainer.

Minimum Tax Rules Hobble Europeans, EU Parliament Report Warns - Saim Saeed, Bloomberg Tax ($):

“The coexistence of Pillar Two with concurrent domestic minimum tax regimes leads to fragmentation and weakens its global application,” according to the draft, by Kinga Kollar, a Hungarian member of the Parliament who belongs to the European People’s Party.

The draft backed efforts by the European Commission, the bloc’s executive, to simplify EU tax rules. But it also recommended looking at ways to simplify the minimum tax law, especially to “alleviate the implementation burden of Pillar Two on the tax administrations of smaller member states.”

Anti-Tax Anger on Both Sides

So Nobody Is Going To Pay Taxes Now? - Annie Lowery, The Atlantic:

Over the past decade, the share of Americans who believe that their income-tax bill is unfair has climbed by 14 percentage points. A majority of Americans, in both parties and at all income levels, say that they are kicking in too much. The National War Tax Resistance Coordinating Committee, which teaches people how to conscientiously object to income levies, reports surging interest in its training sessions. Grassroots groups around the country are fighting to “ax the tax.” Most people want rates to go up—just not on them.

No wonder. For 50 years, Republicans have made taxes out to be the enemy of the government and the governed alike, passing cuts that have increased inequality and spilled red ink. Ronald Reagan argued that “taxes should hurt” as he dropped the top marginal rate from 70 percent to 28 percent. (Shouldn’t hurt that much, I guess!) George W. Bush provided “relief” to families, while phasing out levies on multimillion-dollar estates and lowering charges on capital gains. Over the past year and a half, Donald Trump has foghorned about what he has done for waiters and whispered about what he has done for real-estate developers. “Every single American at every income level has more money in their pockets,” he told supporters in Las Vegas earlier this month. Technically true—the worst kind of true. The One Big Beautiful Bill Act cut the tax liability of 85 percent of households, though 60 percent of the cuts went to the wealthy.

See "Blogs and Bits" below to learn about similar tax exemptions being proposed at the state level.

California Wealth Tax Reactions

It looks like a one-time wealth tax will be on California's ballot in November (see yesterday's roundup)--Bloomberg Tax delves into the populist trend behind this while the Wall Street Journal's opinion page blasts the effort.

How New Populist Anger Fuels US "Tax the Rich" Explainer - Caitlin Reilly, Bloomberg Tax ($):

The trend underscores a deepening strain of populist anger at the rich. A December Economist/YouGov poll found 61% of Americans believe billionaires are taxed too little. It also reflects a need to raise revenue in states facing budget shortfalls — in some cases worsened by federal funding cuts under the One Big Beautiful Bill Act, which Congress passed in July.

The passage of these changes in more states would widen the already significant divide in the tax codes between states led by Democratic versus Republican governors.

California Wealth Tax Advances - Editorial, The Wall Street Journal:

Progressives are testing how much ruin there is in California. On Sunday they said they’ve gathered enough signatures to place a wealth tax referendum on the November ballot, even as a new study shows it is likely to result in less state revenue.

The proposed ballot measure would impose a (supposedly) one-time 5% tax on individuals with more than $1 billion in wealth. The tax would hit nearly all of a billionaire’s assets including trusts, as well as voting interests in a company if that exceeds his equity stake. It applies to billionaires who were California “residents” as of Jan. 1 this year.

See "Blogs and Bits" below for steps to take to leave California amid tax hikes.

Deep Dives

The Path Ahead for Political Activity and Tax-Exempt Orgs - Marie Sapirie, Tax Notes ($):

The stakes for section 501(c)(4) organizations could be high, especially if the regulations are completely struck down as overbroad. Any new rules won’t have the benefit of administrative interpretation beyond individual rulings until general rules get hashed out through litigation. Until the district court rules — and maybe even after, if the decision is appealed — organizations likely should take a more qualitative look at whether they engage in political activity, said Alexander L. Reid of Baker & Hostetler LLP.

Freedom Path is contesting the denial of its status as a tax-exempt social welfare organization under section 501(c)(4). It argues that the guidance on which the IRS and Treasury relied to deny its application is unconstitutionally vague. The court agreed and asked for briefing on “interpretations of the Primary Activity inquiry and Political Activity inquiry that are (a) not unconstitutionally vague and (b) appropriately rooted in the statutory and regulatory scheme, and constitutional principles, that govern this tax exemption.”

Closing the Gap: How Polish Local Governments Boost Tax Morale - Emilia Sroka, Tax Notes ($):

Over 80 percent of respondents consider taxes in Poland to be excessively high — a statement with which only one in 10 disagrees, although OECD data show that the share of personal income-related taxes in Poland (12.7 percent of total tax revenues) is significantly below the OECD average (23.7 percent of total tax revenues).

What might explain these skeptical attitudes? Cultural factors and the quality of state institutions are key determinants of tax morale and resulting tax consent.

Blogs and Bits

Stronger Start for Working Families Act Would Help Low-Income Workers - Elaine Maag and John Wong, Urban-Brookings Tax Policy Center Taxvox blog. "The proposal would make one simple change to the child tax credit (CTC) to better support families with very low earnings."

Minnesota Should Not Pay for Bad Tax Policy with More Bad Tax Policy - Abir Mandal, Tax Foundation blog. "A pair of bills introduced in the Minnesota House—HF 3954 (overtime) and HF 3955 (tips)—would further erode the state’s tax climate by exempting certain overtime pay and tip income from Minnesota’s income tax."

To Leave High California Taxes Behind, Consider These Steps - Robert Woods, Forbes. "If you hope to avoid paying California taxes, moving away still works, but it pays to know the factors that the California Franchise Tax Board considers in assessing residency."

What day is it?

It's National Blueberry Pie Day! Maybe my third or fourth favorite type of pie. Perfect treat for the spring..