Key Takeaways
- Gas tax freeze fever sweeps D.C.
- But will it help consumers?
- New York rolls out more taxes on expensive homes.
- IRS has new conservation easement offer, promises more tax abuse crackdowns.
- Tariff refunds trickle down to businesses, not so much consumers.
- National Pizza Party Day!
Ed Note: As Joe announced on April 30, I'm taking over the Tax News and Views blog. He made my job easy—all I have to do is continue the momentum and not lose the readership he's built up! There will be a few changes, though, including the new weekly roundup, debuting today. Thank you to all of our readers and please don't hesitate to let me know your thoughts about the blog.
Gas Tax Freeze Fever
Trump wants to pause the federal gas tax. Here’s what that could mean. - Victoria Craw, The Washington Post ($):
Since the war began in late February, the price of a barrel of Brent crude oil, an international benchmark, has skyrocketed from about $70 to more than $107. U.S. gas prices — now an average of $4.50 a gallon — have reached levels not seen since 2022 and contributed to Trump’s falling approval ratings ahead of the November midterms.
W&M Chair Open to Gas Tax Holiday Idea, but Cost Concerns Remain - Cady Stanton, Tax Notes ($):
House Ways and Means Committee Chair Jason Smith, R-Mo., told reporters May 13 that he’s heard from a number of constituents that gas prices are their number one concern and called for action by lawmakers on the issue.
“Anything Congress can do to help relieve the pain that Americans are facing, we need to do it,” Smith said.
Smith added that a bill related to the effort would go through the Ways and Means Committee, but declined to share specific legislative efforts the panel may be taking.
Would Pausing the US Federal Gas Tax Help Drivers?: Explainer - Ari Natter, Bloomberg Tax ($):
Senate Majority Leader John Thune said that he’d be willing to hear Trump and other colleagues out on the idea, but noted he’d prefer reopening the Strait of Hormuz.
“In the past I’ve not been a huge fan of previous attempts,” Thune said Tuesday. “If you lifted that, does that get ultimately passed on to the consumer?”
Gas Tax Pause Faces Unclear Path - Alex M. Parker, Eide Bailly:
Many economists and tax experts doubt it would provide much relief, while costing the Trust Fund, which covers highway and road construction projects, billions. (In 2008, economist Paul Krugman claimed that it wouldn’t reduce gas prices at all—although he later clarified that this was partly due to the timing of the proposed suspension.)
The experts are unimpressed
The Tax Foundation: "Gas tax holidays have appeal across the political aisle, but suspending the federal gas tax is a uniquely ill-suited policy for addressing rising prices."
The Bipartisan Policy Center: "A suspension would provide modest, temporary relief to consumers at the pump, but in doing so, would blow another hole in the federal deficit and further strain the user-pay, user-benefit system of the [Highway Trust Fund.]"
Penn-Wharton Budget Model: "A four-month federal gas tax suspension would cost the Highway Trust Fund roughly $11.5 billion in lost revenue, with consumers seeing only partial price relief."
A new tax on NYC real estate sales aimed at helping Mamdani close city budget gap - Josephine Stratman, The New York Daily News:
That new surcharge is expected to be included in the state budget, which is now more than six weeks late.
The tax on cash sales of real estate of $1 million or more is part of the package from the state intended to help close the city’s multibillion-dollar budget gap, Heastie told reporters in Albany Thursday.
NY Plans Tax on City Homes Over $1 Million Bought With Cash - Raga Justin, Danielle Muoio Dunn, Laura Nahmias and Nacha Cattan, Bloomberg Tax ($):
The lawmakers are also considering expanding the tax to all-cash purchases over $1 million in New York, including those in the suburbs and upstate, people familiar with the matter said.
The New York City levy alone is expected to raise $160 million to help fill the city’s budget hole, said one of the people who asked not to be identified when discussing private deliberations. The proposed tax would be levied at 1% of the purchase price and would be paid by the buyer, according to the people.
A spokesperson for Governor Kathy Hochul said she “announced a general agreement with the State Legislature on many of the major elements of the FY 2027 Budget. The final budget bills will provide additional details.”
Eide Bailly State and Local Tax
Easing on Easements?
New IRS Easement Settlement Offer Eliminates Up-Front Payment - Kristen A. Parillo, Tax Notes ($):
The liability will instead be subject to post-settlement collection, according to a May 13 IRS release detailing the terms of the settlement initiative.
The new offer — the fourth one issued since June 2020 — applies to cases docketed in the Tax Court and to nondocketed cases, meaning those under audit or seeking reconsideration by the IRS Independent Office of Appeals immediately after an audit. There are now 740 easement cases docketed in the Tax Court and 400 cases under exam, the IRS said.
IRS’s Third Settlement Push Tests Taxpayers in Easement Fight - David Schultz, Bloomberg Tax ($):
Michelle Levin, a petitioner-side tax litigator with Dentons who’s working on several of these cases, said this latest offer is the exact same as the one IRS offered two years ago. “But it definitely doesn’t seem to have addressed the more global issues,” she said.
Those issues include the large partnerships that often form to take advantage of the tax benefits of donating land for a conservation easement. Often many dozens of investors will form a partnership to claim shares of the easement and each of those investors have a say in whether and how to settle a tax dispute with the IRS, creating a situation where full consensus among a partnership is needed to resolve a case.
More IRS Action Aimed at Tax Controversies Coming, Kies Says - Trevor Sikes, Eide Bailly:
“Let me just say that’s not the last initiative that we’re going to have,” Kies, who is also Treasury assistant secretary for tax policy, said May 14 at a conference sponsored by the Tax Council Policy Institute.
Kies said the IRS has also been looking into captive insurance and economic substance doctrine controversy issues.
International Developments
Tariff Refunds Begin to Reach Businesses as Trump Lashes Out at Court - Tony Romm, The New York Times:
At least two businesses confirmed this week that they had received a partial refund, almost three months after the nation’s highest court determined that Mr. Trump did not have the power to enact his original, country-by-country duties without Congress.
The refund process is expected to be extensive, expensive and lengthy. The government must return money to about 330,000 importers, federal officials previously estimated, sending back what they paid in taxes. That money must be paid with interest, which is accruing at an estimated rate of about $650 million per month.
See Eide Bailly's guide to tariff refunds here.
Poland Stands By Digital Services Tax Plan, Rebuffing US Threats - Agnieszka Barteczko, Bloomberg Tax ($):
The legislation, which seeks to introduce a levy of up to 3% on digital platforms, has been criticized as unfair and harmful by US tech giants including Alphabet Inc.’s Google.
“Representatives of the US administration are expressing far-reaching skepticism, but I remain firm — we are the ones who set taxes in Poland,” PAP news agency quoted Domanski as saying on Wednesday.
Opinion: Looming Global Minimal Tax Deadlines Require Clarity and Urgency - Christian Kaeser, Business at OECD, Bloomberg Tax:
These gaps would be concerning in any context. They’re especially troubling in a regime where late, incomplete, or technically non-compliant filings can attract penalties, trigger procedural consequences, or jeopardize access to safe harbors—even for most in-scope multinationals for which there is no top-up tax or liability is immaterial.
See more about this issue here.
Eide Bailly International Tax.
Note: On Friday morning, top OECD tax official Manal Corwin announced limited relief for companies that file a Pillar Two return in any jurisdiction which has outlined documentation requirements.
Blogs & Bits
The Tax Law Is Having A Constitutional Moment Edition - Kelly Erb, Forbes Tax Breaks. "The Supreme Court tackled another tax-related case this term, ruling that a New Jersey nonprofit could immediately challenge a state subpoena seeking sensitive donor information, rather than waiting until the government tried to enforce it."
New Taxes on Nicotine Pouches in the EU Could Hamper Health Goals - Adam Hoffer, Jacob Macumber-Rosin, The Tax Foundation. "A more workable solution is to group products into categories, allowing for differentiated tax rates without requiring exact measurements."
State and city taxes add a lot to rental car costs - Kay Bell, Don't Mess With Taxes. "Gas taxes are a top concern of drivers right now. But if you’re pumping the fuel into a rental vehicle, that’s just one of many taxes you’ll face."
Taxpayer Advocate Encourages Taxpayers to Claim COVID-Era Refunds Before July 10 - Parker Tax Publishing. "The Taxpayer Advocate observed that impacted taxpayers represent a broad cross-section of the public, including individuals, small business, large corporations, estates, and trusts. The issue reaches taxpayers with obligations related to income, employment, estate, gift, and excise taxes."
What day is it?
It's National Pizza Party Day! Great idea for the weekend!
