Tax News & Views Weekly Roundup

More Trump-IRS Agreement Fallout

Audit Immunity for Trump Family Puts I.R.S. in a Bind - Andrew Duehren, The New York Times:

Tax lawyers and former I.R.S. officials said such expansive protection would cut to the core of the agency’s mission to collect taxes in a disinterested, nonpartisan way — and could potentially run afoul of the laws governing how it does so.

“It’s just completely contrary to the notion that you’re supposed to comply with the law and the I.R.S. is there to make sure you do that,” said George Yin, a tax law professor and former chief of staff at the congressional Joint Committee on Taxation. “The idea that you can get a free pass from the I.R.S. or anyone can get a free pass from the I.R.S. is just completely ridiculous.”

Tax world gawks at Trump audit agreement: 'Never seen anything like this' - Brian Faler, Politico:

Astonishment is rippling through tax world at a settlement that goes far beyond the specifics of Trump’s suit — he sought billions of dollars as compensation for some of his tax records being leaked to the news media — to instead provide him, his family and his businesses sweeping protections against government scrutiny of his taxes.

Under the plan signed off on by Acting Attorney General Todd Blanche, the IRS would be “FOREVER BARRED and PRECLUDED” from all audits of “any matters currently pending.” What’s more, some worry it may mean Trump will never again be audited by the agency, pointing to vague language in the settlement barring examinations that stem from “lawfare.”

“I’ve never seen anything like this,” said Steve Rosenthal, a former longtime senior fellow at the Tax Policy Center, a nonpartisan think tank.

Neal Probes IRS, DOJ on Tax Implications of Trump Deal - Ben Valdez, Tax Notes ($):

House Ways and Means Committee ranking member Richard E. Neal, D-Mass., is pressing Treasury, the IRS, and the Justice Department for more information on President Trump’s “Anti-Weaponization Fund” and whether it comes with tax implications for Trump and his family.

In a May 20 letter, Neal and House Judiciary Committee ranking member Jamie Raskin, D-Md., urged the agencies to preserve all records of the agreement reached in Trump’s lawsuit against the IRS, which created a $1.8 billion fund for individuals who allege they were victims of government “weaponization and lawfare.” They also requested any internal memoranda or briefs prepared by IRS personnel regarding the lawsuit.

Democrats’ 100% Tax Plan on Fund Payouts Zeroes In on GOP Angst - Chris Cioffi, Bloomberg Tax ($):

Democrats are trying to force the GOP’s hand by introducing a 100% tax on payments from the Justice Department’s new fund for victims of government weaponization, even as Republicans face increasing pressure on what’s become a politically toxic $1.8 billion pot of money.

Rep. Mike Thompson (D-Calif.) unveiled his version of the proposal Wednesday and Republicans thwarted his attempt to force a vote on other legislation targeting the fund Thursday at a Ways and Means Committee markup.

Shakira, Shakira!

Pop star Shakira reaches a deal with Spanish prosecutors on the first day of tax fraud trial - Joseph Wilson, Associated Press:

Under the deal, Shakira is to receive a suspended three-year sentence and to pay a fine of 7.3 million euros ($8 million) in addition to the previously unpaid taxes and interest. She will pay another fine of 432,000 euros ($472,000) in exchange for having her prison sentence waived.

However, she now has it on her legal record that she was found guilty of tax fraud, which could affect another pending tax case.

The fraud allegations had hinged on where Shakira, now 46, lived during 2012-14. Prosecutors in Barcelona alleged the Colombian singer spent more than half of that period in Spain and therefore should have paid taxes on her worldwide income there even though her official residence was still in the Bahamas. Tax rates are much lower in the Bahamas than in Spain.

Shakira’s Spain Tax Win Shows ‘Whenever, Wherever,’ Proof Counts - Xavier Segui (NAX Law), Bloomberg Tax:

Shakira’s victory against the Spanish tax authorities reminds us of an essential truth—tax residency ultimately depends not on formal declarations, but on facts and documents capable of withstanding scrutiny.

Spain’s National Court ruled on May 18 that the pop star wasn’t a tax resident in Spain in 2011, annulling approximately 54 million euros ($69.7 million) in tax assessments and penalties and ordering her to be paid 60 million euros, including interest.

The case revolved around a simple but deceivingly complex question: When did Shakira become a tax resident in Spain?

Movement in Congress

The Pitt Actor Backs Bipartisan Healthcare Worker Tax Credit - Cady Stanton, Tax Notes ($):

Two-time TV doctor Noah Wyle visited Capitol Hill to voice his support for bipartisan legislation that would provide a monthly tax credit to healthcare workers in areas with medical provider shortages.

The actor, who stars as Dr. Michael “Robby” Robinavitch on HBO’s The Pitt and previously played Dr. John Carter on ER, participated in a rally in Washington May 21 sponsored by FIGS Inc., a medical scrubs company.

Wyle joined lawmakers, healthcare workers, and content creators in backing the Healthcare Is Human Act of 2026 (H.R. 7884), introduced earlier this year by House Ways and Means Committee members Claudia Tenney, R-N.Y., and Steven Horsford, D-Nev. The bill would create a monthly tax credit ranging from $300 to $500 for healthcare workers who provide services in federally designated health professional shortage areas and Veterans Affairs medical facilities.

New Tax Credits Proposed for Housing and Healthcare: - Macon Atkinson, Bloomberg Tax ($):

Bipartisan members of the House Ways and Means Committee are introducing a tax bill aimed at lowering construction costs and creating stronger incentives to build rental housing.

Reps. Linda T. Sánchez (D-Calif.), Claudia Tenney (R-N.Y.), Jimmy Panetta (D-Calif.), and Darin LaHood (R-Ill.) introduced the Rental Housing Investment Act Thursday, which they say would modernize cost recovery in the tax code and encourage greater private investment in rental housing.

“Our bill removes a real barrier to building more housing to give working families a shot at finding a home they can afford,” Sánchez said in a statement to Bloomberg Tax.

International Developments

As Australia Digs In on Tax, Multinationals Squirm - Caleb Harshberger, Lauren Vella and Deborah Nesbitt, Bloomberg Tax ($):

Like tourists who come for the koalas but keep finding spiders and snakes, companies lured to Australia’s singular market are navigating a flip side of doing business Down Under: the Australian Taxation Office.

The ATO this year is doubling down on its muscular approach to taxing and tracking foreign businesses—despite a major legal setback. And that’s prompting renewed complaints from US and European corporations.

“In fairness, maybe that’s a badge of honor for the ATO,” said Michael Clough, Australian chair and partner at King & Wood Mallesons. “They’re unashamedly implementing a policy of ensuring all multinationals pay.”

Digital Taxation Talks Won’t Conclude by Year-End, Kies Says - Stephanie Soong, Tax Notes ($):

Multilateral negotiations at the OECD over digital taxation issues are unlikely to lead to an agreement by the end of 2026 despite pressure to wrap up talks by then, a top Treasury official said.

The United States isn’t under any deadline to conclude the negotiations, said Kenneth Kies, Treasury assistant secretary for tax policy and acting IRS chief counsel. “There is much work that needs to be done just to understand the landscape,” he said. Kies spoke May 15 at the annual Pacific Rim Tax Conference in San Francisco.

Kies noted that there have been recent calls for finalizing a solution in 2026 to address the tax challenges of the digital economy.

Swiss See Global Tax Carveout Deterring US Business in Country - Somesh Jha, Bloomberg Tax:

Switzerland will face competitive challenges in attracting US multinationals under the OECD-led revised global minimum tax framework, a Swiss tax official warned Thursday.

US companies operating in Switzerland must still pay the country’s 15% minimum tax under the agreement, but they can avoid it by relocating to countries that haven’t implemented a similar measure, which could disadvantage the country, said Marc-Antoine Bree, project manager for tax policy at Switzerland’s Federal Tax Administration.

Eide Bailly International Tax.

Ultra-Wealthy Weigh In on Taxes

Jeff Bezos's tax proposal: Some Americans should pay zero federal income tax - Hal Bundrick, Yahoo Finance:

Amazon executive chairman Jeff Bezos, by some estimates the world's fourth-wealthiest person, has turned the tables on the "tax the rich" effort. He is advocating for eliminating federal income taxes for lower-income Americans.

In an interview on Wednesday with CNBC, Bezos reflected on his upbringing as the son of a Cuban immigrant and a teenage mother, who "brought themselves up" during hard times.

"I want to make sure that the people who are struggling today have a chance to do that, too, to bring themselves up, and maybe they're going to be the next Steve Jobs,” Bezos said. “Maybe one of their kids will be the next Steve Jobs. I don't know, but we can give them a better chance by eliminating their tax bill."

Sergey Brin Funds Opposition to San Francisco ‘Overpaid’ CEO Tax - Biz Carson, Bloomberg Tax ($):

The donation, reported in a filing on Wednesday, is to oppose a proposal that would levy a higher tax on companies that have “overpaid” chief executives that’s being put before San Francisco voters in June. The union-backed proposal would impose an eight-fold increase to a gross-receipts tax on any large company doing business in San Francisco where the highest paid executive earns 100 times or more than their median employee.

The measure could generate additional revenue of $250 million to $300 million to the city, according to the city controller’s analysis.

Blogs & Bits

“High-Tax to Low-Tax” Headlines Miss The Complexity of Interstate Migration - Lucy Dadayan, Urban-Brookings Tax Policy Center TaxVox. "Headlines often tell a simple story: Taxpayers are fleeing high-tax states like California and New York for no-income-tax states like Florida and Texas. But a deeper dive into the latest IRS data on taxpayer moves and the broader forces that drive migration decisions reveals a more nuanced picture."

Billionaires Already Pay More than Their Fair Share - Adam Michel, Liberty Taxed. "I strongly believe that wealth is good and that someone has to stand up for unpopular groups."

The ‘Black Women Best’ Framework: An Innovative Method for Showing How Inheritance Taxes Affect the Racial Wealth Gap - Brakeyshia Samms, Francine Lipman, Institute on Taxation and Economic Policy. "Tax policies that contribute to wealth inequality, include but are not limited to corporate and income tax rate cuts, preferential tax treatment of capital gains compared to wage income, and the weakening of estate taxes."

Trump and Shakira get good tax news - Kay Bell, Don't Mess With Taxes. "The global tax gods apparently got together and decided this week to make the financial lives of some wealthy celebrities easier."

Check out our International, D.C. and State/Local roundups for more of this week's tax news.

What day is it?

Road Trip

It's National Road Trip Day! Enjoy the long Memorial Day weekend!