Tax News & Views Weekly Roundup: Crypto, Social Security, and Royal Taxes

Crypto Tax Bill Prospects

Sticking Points Emerge for House Crypto Tax Legislation - Katie Lobosco, Tax Notes ($):

The tax treatment of mining and staking rewards and how to ease the tax burden for those using digital assets to make small, everyday purchases have emerged as two of the most controversial provisions.

Misaligned political priorities could also prevent Congress from passing crypto tax legislation this year. While some lawmakers see an urgency to create clearer rules for digital asset users, senior Democratic taxwriters appear less prepared to proceed before gaining a better understanding of the industry.

Taxes in Court

Coca-Cola Meets Sympathetic Judges in $20 Billion IRS Case - David Schultz and Michael Rapoport, Bloomberg Tax:

A panel of federal appellate judges were receptive to Coca-Cola Co.'s arguments that the IRS improperly allocated its foreign income in a case that could cost the soft drink company up to $20 billion.

The judges asked the Justice Department tough questions at Thursday’s hour-long oral arguments in the US Court of Appeals for the Eleventh Circuit in Miami. They pressed the government on one of Coca-Cola’s key contentions—that a sudden change by the IRS in how it allocated the company’s income between the US parent company and its foreign affiliates was arbitrary and unfairly applied on a retroactive basis.

IRS Hopes to Notch Economic Substance Win in Tax Court - Kristen Parillo, Tax Notes ($):

The IRS is aiming to build on its Liberty Global win by urging the Tax Court to apply the codified economic substance doctrine to a California couple’s monetized installment sale (MIS) transactions.

Congress tailored Section 7701(o)’s economic substance doctrine and associated strict liability penalty to respond to “machinations” like MIS transactions, the IRS asserted in its June 10 post-trial brief in Harty v. Commissioner.

Social Security

As Social Security faces trust fund depletion, some Washington lawmakers call for taxing high earners - Lorie Konish, CNBC:

On Tuesday, Sens. Elizabeth Warren, D-Mass. and Bernie Moreno, R-Ohio, co-wrote an op-ed that said they are working together on legislation to lift the payroll tax cap to help improve Social Security’s solvency.

Currently, earnings up to $184,500 are subject to Social Security payroll taxes. High earners do not pay into the program for the rest of the year once they hit that cap. On March 9, individuals with $1 million in annual wage and salary earnings stopped paying Social Security payroll taxes for 2026, according to the Center for Economic and Policy Research.

See the Tax Foundation's take on the senators' proposal here.

International Developments

EU Proposes Tax Simplification Measures in Bid to Boost Business - Saim Saeed, Bloomberg Tax ($):

The proposed measures include ending withholding taxes for intra-EU dividends, interest and royalty payments, streamlining financing rules, and removing overlapping reporting requirements. They are part of a broader EU push to make it easier to do business in the bloc and boost industry. The contents of Wednesday’s package were first reported by Bloomberg earlier this month.

The commission wants to reduce reporting obligations by 25% and 35% for small and medium-sized enterprises. The package, which includes a tax simplification bill and a revision of the bloc’s tax reporting and data sharing rules, would generate about €3.3 billion in annual administrative savings and support cross-border investment within the single market, the commission said.

Insight: Australia Sharpens Tax Focus on Foreign Investors, Multinationals - Amy Liu (Colin Biggers & Paisley), Bloomberg Tax:

Australia’s 2026-27 federal budget confirms that the government seeks to broaden the foreign resident capital gains tax regime and adopt the OECD’s “side-by-side” package into its global and domestic minimum tax rules—two measures will reshape how the country taxes foreign investors and large multinationals. These groups should reassess their structures and documentation as both measures carry retrospective elements and meaningful compliance obligations.

California Dreaming

Newsom urges a national "billionaires' tax" while fighting one in California - Jonathan J. Cooper, Associated Press:

Newsom said the solution is a new national tax policy, rather than a state-by-state system. He proposed a minimum tax on anyone with a net worth above $100 million. He also wants to make it illegal for the wealthy to borrow against their stock portfolios to fund their luxury lifestyles tax free.

Newsom said there should be new rules for inheritance taxes, warning that “the transfer of wealth among the ultra-wealthy will lock in a permanent American aristocracy of inherited wealth.” And he wants to raise corporate tax rates to where they were before President Donald Trump’s first-term tax cut.

The King's Taxes

King Charles III becomes first British monarch to release tax details - NBC News

The decision was announced Thursday during a briefing on royal finances at which Charles became the first British monarch to reveal the taxes he paid to the government. The king paid 12.9 million pounds ($16.1 million) in income and capital gains taxes in the 2024-25 financial year, up from 11.7 million pounds the previous year.

Comments on Energy Credit Court Decision

Hits and Misses in the Opinion Vacating the Solar and Wind Notice - Marie Sapirie, Tax Notes ($):

“I think the biggest effect of the case, if it stands, is that it gives developers that did significant physical work but also met the 5 percent safe harbor a backup argument,” said David Burton of Norton Rose Fulbright US LLP. He added that the opinion could also be helpful to a small class of solar projects over 1.5 megawatts that don’t need a master power transformer and don’t yet have permits to start breaking ground and pouring concrete, because that subset of developers has struggled to figure out how to begin construction without purchasing modules and other project components. “The opinion is late in the process,” Burton noted. The July 4 deadline is close, so taxpayer behavior will likely be only minimally affected.

Blogs & Bits

Should data centers pay a carbon tax? - Matthew Yglesias, Slow Boring newsletter. "We know voters hate carbon pricing. And we also know that voters hate data centers. So what if we … made data centers pay a carbon tax?"

A Year Later, Many States Have Decided Not to Double Down on Trump’s Tax Cuts - Nick Johnson, Institute on Taxation and Economic Policy blog. "The problem for states is that incorporating Trump tax law provisions into state tax codes would neither boost state economies nor help families make ends meet."

Three Questions to Ask About New Tax Transparency Regimes - Daniel Bunn, The Tax Foundation Tax Policy Blog. "The data does provide new information, but that information comes with challenges of comparability across sources, questions of usefulness for policy discussions, and clear flaws in the reporting requirements."

What Day Is It?

Coconuts

It's National Coconut Day! Perfect for summer, such a tasty and useful fruit.