Tax News & Views Weekly Roundup: Treasury Testimony, Global Tax News and Donuts

Bessent Goes to Capitol Hill

Bessent, House Taxwriters Spar Over Impact of Admin’s Tax Cuts - Jared Serre, Tax Notes ($):

Bessent, appearing June 4 before the House Ways and Means Committee, touted the positives of the Working Families Tax Cuts, noting that the average tax refund amount is up 11 percent this filing season over last year as a result of no tax on tips or overtime pay and other new provisions.

“The ranking member likes to say we overpromised and underdelivered — that is incorrect because so many people owed taxes last year,” Bessent said. “The dollar increase was actually much larger, going from negative to positive.”

Taxpayers saved more than $82 billion this filing season from the Working Families Tax Cuts, according to Treasury data released June 2. The “no tax on overtime” provision was among the most popular deductions, with 29 million taxpayers receiving an average deduction of about $3,100.

Bessent offers no answers on status of Trump’s tax audit immunity - Danny Nguyen, Politico:

Treasury Secretary Scott Bessent had few answers for the Senate Finance Committee on Wednesday as Democratic and Republican members alike pressed him on a now-shelved plan by the Trump administration to create a $1.8 billion fund accessible to the president’s allies.

It was Bessent’s first appearance before Congress since the May 18 agreement between President Donald Trump and the Justice Department to settle Trump’s $10 billion lawsuit against the IRS over his tax returns being leaked to the media by a contractor. But Bessent largely deflected the bipartisan questioning, instead deferring to acting Attorney General Todd Blanche, who told House lawmakers Tuesday the government was “not moving forward” with the “Anti-Weaponization Fund.”

International News

Canadian Government Orders Review of Streaming Tax Policy - Stephanie Soong, Tax Notes ($):

The Department of Canadian Heritage announced in a June 3 release that Minister of Canadian Identity and Culture Marc Miller has directed the Canadian Radio-television and Telecommunications Commission (CRTC) to review its May 21 decision to require large streaming companies to contribute 15 percent of their annual revenue to support Canadian programming. That includes a 5 percent base contribution that online streaming services already pay.

The decision would impose new costs on those companies, which could then be passed on to Canadian consumers through price increases, the department said, adding that it will set out new policy directions to adjust the Online Streaming Act’s implementation.

The review is “another step to reinforce affordability for Canadians,” Prime Minister Mark Carney told reporters June 3. “This is not the time to raise costs for Canadians.”

Will streaming and social media taxes become the next front in the digital tax front? See more about this issue in this week's International Tax Weekly.

US Businesses Urge Treasury to Protect Them in Global Tax Deal - Lauren Vella, Bloomberg Tax ($):

US officials should ensure countries at the OECD don’t further complicate the global minimum tax rules and target US companies, a business group urged the Treasury Department in a letter released Wednesday.

The Alliance for Competitive Taxation expressed concern about the Organization for Economic Cooperation and Development’s plans to release “integrity” guidance under the global minimum tax following a deal struck by countries Jan. 5 that would carve out US companies from parts of the minimum levy’s framework.

“We recognize that the side-by-side agreement contemplates further OECD discussions with respect to any ‘level playing field risks’ to Pillar Two,” the group, a coalition of 48 companies, wrote June 1 to Treasury Secretary Scott Bessent, referring to another name for the global minimum tax.

Panama Aims for Removal From EU Tax Haven List by October - Saim Saeed and Jorge Valero Galarreta, Bloomberg Tax ($):

Panama is pushing to get off the EU’s tax blacklist after passing new tax rules, Finance Minister Felipe Chapman said Wednesday.

“For us, it’s quite important to do as much as possible for this to be addressed in October,” Chapman told Bloomberg in an interview.

The Central American nation has been on the EU’s so-called list of noncooperative jurisdictions—countries that score low on tax transparency and efforts to fight tax avoidance—since 2020, which has hurt foreign direct investment and business relations between Panama and the EU, Chapman said.

The EU Foreign Subsidies Regulation: The Next State Aid Frontier - Mindy Herzfeld, Tax Notes ($):

The penalties and remedies that apply if a company is found to have benefited from a state subsidy outside the EU are indeterminate. But at a minimum, the reporting obligations of U.S. companies to the EU under the FSR impose yet another compliance burden for U.S. companies operating in the EU and provide the European Commission with extensive competitive information on U.S. companies and their European subsidiaries.

It’s no small irony that the EU’s crackdown on foreign subsidies comes at the same time that it’s vastly expanding the ability of member countries to provide subsidies as exemptions to the application of the state aid doctrine.

Eide Bailly International Tax.

More OBBBA Fine Print?

Trump’s ‘big beautiful bill’ has a ‘double taxation’ trap for top earners, tax experts say - Hayley Cuccinello, CNBC:

The “one big beautiful bill” came with many tax benefits for top earners, despite limiting how much they can deduct. However, lawyers and accountants for the wealthy said they have discovered a surprise buried in the footnotes of a tax law guide released last week by Congress’ policy staff that could amount to double taxation.

The deduction cap is imposed on trusts and estates, the experts said, which was unexpected. Even if a trust gave all its income to its beneficiaries, it would have to pay taxes on a portion of that income, according to their interpretation of the document.

Eide Bailly Wealth Transition Services.

Crypto Tax News

House Committee Preparing Bills to Forge Crypto Tax Structure - Chris Cioffi and Caitlin Reilly, Bloomberg Tax ($):

While individual members have put forward measures that would address the taxation of digital assets, the bills being presented represent the first effort backed by leadership of either the House or Senate tax-writing committees. The Treasury Department has also been involved in the process.

The industry has pushed for legislation that would create parity between the tax treatment of digital assets and traditional financial instruments, as well as clearer guidelines for situations that don’t have clear corollaries in traditional finance.

IRS Employee Woes

Short List to Reclassify Titles at IRS Hits Influential Advisers - Erin Slowery, Bloomberg Tax:

The Trump administration’s order allowing the IRS to reclassify more than a dozen positions making them easier to fire includes some of the most influential positions at the embattled agency.

President Donald Trump’s long-awaited executive order signed Wednesday targets some of the highest-level career staffers in the federal government, classifying them so they’re treated like political appointees and removing key job protections.

Former Chamblee IRS employee says severe rat problem led to resignation - Annie Mapp, FOX 5 Atlanta:

A former Internal Revenue Service employee says a reported rat infestation inside the agency's Chamblee office became so severe that she decided to quit her job.

According to Sydney Monger, the situation is at the Chamblee Tucker Road location.

She claims rats began appearing throughout the building last month, prompting concerns about health and safety in the workplace.

Blogs & Bits

The 2025 Tax Bill Was Not Targeted Toward Low-Income Families - Benjamin R. Page and Renu Zaretsky, Tax Policy Center Taxvox blog. "While several OBBBA provisions affect 2025 returns—such as temporary tax breaks for tips, overtime, car loan interest, and seniors—its most expensive, least progressive changes don’t begin until 2026, when lower marginal tax rates enacted by the 2017 Tax Cuts and Jobs Act (TCJA) were set to expire."

Illinois’ New Social Media Tax Is a Shambles - Jared Walczak, Tax Foundation Tax Policy Blog. "Illinois’ new social media tax was in the works for months, but it has the appearance of something lawmakers hit 'post' on too soon."

States Can Raise Billions by Ending a Tax Giveaway to Big Tech - Nick Johnson, Institute on Taxation and Economic Policy. "An advertising tax offers a way to raise significant money from a sector of the economy that has been getting a free ride for decades."

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

What day is it?

paper clips

It's National Donut Day! .A good day to grab the most decadent breakfast option, but also to reflect on the history of the date, which was established in 1938 in honor of the Salvation Army's "Donut Lassies" who brought the pastries to soldiers on the front lines of World War I.