Key Takeaways
- Scam victims claim tax bill has worsened the damage.
- Trump reinstitutes tariffs with new laws, but less revenue haul following court decision.
- House GOP pushes new nonprofit restrictions bill.
- Ex-Treasury officials expects tips/OT deduction to stick.
- National Amelia Earhart Day!
Crypto Disclosure Overhaul
IRS Voluntary Disclosure Refit Aims to Answer Crypto Confusion - Erin Slowery, Bloomberg Tax ($):
Jarod Koopman, chief tax compliance officer and chief of the criminal division, said during a June conference that the IRS is finalizing an update to the disclosure program in the next several months and is weighing whether digital assets should get a separate program.
“We’re trying to make it more streamlined, but it’s also got to be beneficial to both sides,” Koopman said.
It would be the first major overhaul to the program since 2018, and as digital assets have become more popular, tax professionals have lobbied for changes to how those types of transactions are evaluated.
“We’re trying to make it more streamlined, but it’s also got to be beneficial to both sides,” Koopman said.
It would be the first major overhaul to the program since 2018, and as digital assets have become more popular, tax professionals have lobbied for changes to how those types of transactions are evaluated.
Swindle Tax
Scam Victims Say IRS’s Crippling Tax Bills Compound Their Trauma - David Schultz, Bloomberg Tax:
Advocates say the narrowing of the deduction, and how the IRS has interpreted this narrowing, effectively re-victimizes people who’ve already suffered catastrophic losses — especially if, like Flowers, they triggered a taxable event.
“I’m hearing that, when you take that deduction or try to take the deduction, you almost automatically get audited,” said Clark Flynt-Barr, director of government affairs at AARP. “The IRS is basically telling scam victims, ‘Oh, by the way, you owe hundreds of thousands of dollars on money that you never saw that was stolen from you.’”
It “really adds insult to injury,” she said, adding that AARP’s online-fraud support groups are full of people who say they can’t deduct their losses because they fell prey to the “wrong type of scam.”
“I’m hearing that, when you take that deduction or try to take the deduction, you almost automatically get audited,” said Clark Flynt-Barr, director of government affairs at AARP. “The IRS is basically telling scam victims, ‘Oh, by the way, you owe hundreds of thousands of dollars on money that you never saw that was stolen from you.’”
It “really adds insult to injury,” she said, adding that AARP’s online-fraud support groups are full of people who say they can’t deduct their losses because they fell prey to the “wrong type of scam.”
Tariff Update
Trump’s Global Tariffs Will Continue Under Another Trade Law - Chandra Wallace, Tax Notes ($):
The Trump administration imposed new global tariffs of at least 10 percent beginning July 24 — just as the tariffs imposed in late February expire, the Office of the U.S. Trade Representative (USTR) has announced.
The tariffs result from trade investigations initiated in March under section 301 of the Trade Act of 1974, focused on imported goods produced using forced labor. They apply to the top 60 trading partners of the United States, “covering 99.4 percent of U.S. imports,” according to a fact sheet accompanying the announcement.
The tariff rate will be 10 percent for jurisdictions that have adopted, committed to adopt, or partially implemented forced labor import prohibitions, which include Canada, Mexico, and the United Kingdom. All other countries face the 12.5 percent rate, according to the July 23 notice of action.
The tariffs result from trade investigations initiated in March under section 301 of the Trade Act of 1974, focused on imported goods produced using forced labor. They apply to the top 60 trading partners of the United States, “covering 99.4 percent of U.S. imports,” according to a fact sheet accompanying the announcement.
The tariff rate will be 10 percent for jurisdictions that have adopted, committed to adopt, or partially implemented forced labor import prohibitions, which include Canada, Mexico, and the United Kingdom. All other countries face the 12.5 percent rate, according to the July 23 notice of action.
Tariff revenue's $825B gap - Courtenay Brown, Axios:
The intrigue: The administration's replacement tariffs would raise about $105 billion a year — replacing about 60% of the revenue lost when the Supreme Court invalidated the administration's emergency tariff regime, according to the Committee for a Responsible Federal Budget.
Why it matters: The administration's new tariffs are narrower and include more carveouts than the emergency duties they replaced, reducing both the potential economic fallout and the revenue they generate.
Why it matters: The administration's new tariffs are narrower and include more carveouts than the emergency duties they replaced, reducing both the potential economic fallout and the revenue they generate.
In Congress
Senate Panel Advances Nominees for Treasury Deputy, Other Roles - Jared Serre, Tax Notes ($):
To date, Congress hasn’t enacted comprehensive legislation governing the taxation of digital assets. In the absence of a cohesive statutory framework, regulators have filled the void through a series of administrative pronouncements and guidance. The result is a fragmented legal landscape shaped by the IRS, the Treasury, and other regulatory agencies.
From a tax controversy perspective, practitioners must navigate not only tax-specific guidance but also the overlapping and evolving regulatory positions adopted by other agencies. Because a court will generally construe regulatory provisions to fit together rather than create conflict, our analysis and defense of a tax position should also seek to harmonize these various sources of authority.
From a tax controversy perspective, practitioners must navigate not only tax-specific guidance but also the overlapping and evolving regulatory positions adopted by other agencies. Because a court will generally construe regulatory provisions to fit together rather than create conflict, our analysis and defense of a tax position should also seek to harmonize these various sources of authority.
Warren, Dems Investigate Whether IRS CEO Misled Congress - Macon Atkinson, Bloomberg Tax ($):
“The odds of a rich tax cheat being investigated have dropped dramatically with Donald Trump in the White House,” Warren said. “And that’s great for rich tax cheats.”
Bisignano has repeatedly defended the cuts, saying there was “no staffing shortage” at the IRS and telling Congress in May he had “zero staffing concerns.”
The Treasury Inspector General for Tax Administration warned in January that staffing shortages were serious and could impact customer service at the IRS. The National Taxpayer Advocate, an independent watchdog, also found that during the filing season phone wait times more than doubled and that taxpayers struggled to get help with refunds or answers to their questions.
Bisignano has repeatedly defended the cuts, saying there was “no staffing shortage” at the IRS and telling Congress in May he had “zero staffing concerns.”
The Treasury Inspector General for Tax Administration warned in January that staffing shortages were serious and could impact customer service at the IRS. The National Taxpayer Advocate, an independent watchdog, also found that during the filing season phone wait times more than doubled and that taxpayers struggled to get help with refunds or answers to their questions.
Ways and Means Committee Advances Bills to Toughen EO Reporting - Kelsey Brooks, Tax Notes ($):
Legislation that would implement additional reporting requirements and potential penalties for tax-exempt organizations while easing rules for religious organizations advanced to the full House.
The Ways and Means Committee approved the four bills July 22 despite Democratic opposition.
Scrutiny of tax-exempt organizations and their financial arrangements has been a focus of Ways and Means Chair Jason Smith, R-Mo. In May Smith said the committee was examining whether legal standards for exempt organizations adequately account for foreign connections and funding.
The Ways and Means Committee approved the four bills July 22 despite Democratic opposition.
Scrutiny of tax-exempt organizations and their financial arrangements has been a focus of Ways and Means Chair Jason Smith, R-Mo. In May Smith said the committee was examining whether legal standards for exempt organizations adequately account for foreign connections and funding.
Democrats Push Crackdown on Wealthy Savers’ Retirement Accounts - Brett Samuels, Bloomberg Tax ($):
Newly proposed legislation from two congressional Democrats would bar contributions to retirement accounts exceeding $10 million, targeting what the lawmakers called “mega retirement accounts.”
The bill introduced by Rep. Richard Neal (D-Mass.) and Sen. Ron Wyden (D-Ore.) on Wednesday, would amend the IRS code to address both contributions and required minimum distributions for Roth accounts and traditional individual requirement accounts.
“Tax-preferred retirement accounts are not supposed to be a loophole for the ultra-rich to shelter immense fortunes, they’re a lifeline for working Americans who may not otherwise have a dignified retirement,” Wyden said in a statement.
The bill introduced by Rep. Richard Neal (D-Mass.) and Sen. Ron Wyden (D-Ore.) on Wednesday, would amend the IRS code to address both contributions and required minimum distributions for Roth accounts and traditional individual requirement accounts.
“Tax-preferred retirement accounts are not supposed to be a loophole for the ultra-rich to shelter immense fortunes, they’re a lifeline for working Americans who may not otherwise have a dignified retirement,” Wyden said in a statement.
Gambling Loss Haircut Lambasted at IRS Hearing - Trevor Sikes, Tax Notes ($):
The One Big Beautiful Bill Act’s 90 percent limitation on gambling loss deductions is grossly unfair to honest gamblers and should be repealed, according to stakeholders.
Speakers took the opportunity at a July 17 IRS hearing on proposed regulations on gambling losses, expenses, and reporting obligations to warn that the OBBBA’s creation of taxable phantom income would also push taxpayers to gamble illegally and reduce revenue. The stakeholders urged Treasury and the IRS to relay their concerns to Congress and advocate for remedial legislation.
The proposed rules (REG-113229-25), issued April 16, would incorporate the OBBBA’s gambling loss haircut and new information reporting thresholds, and update regulations under sections 165, 3406, 6041, and 6041A.
Speakers took the opportunity at a July 17 IRS hearing on proposed regulations on gambling losses, expenses, and reporting obligations to warn that the OBBBA’s creation of taxable phantom income would also push taxpayers to gamble illegally and reduce revenue. The stakeholders urged Treasury and the IRS to relay their concerns to Congress and advocate for remedial legislation.
The proposed rules (REG-113229-25), issued April 16, would incorporate the OBBBA’s gambling loss haircut and new information reporting thresholds, and update regulations under sections 165, 3406, 6041, and 6041A.
Ex-Treasury Official Expects Extension of Tax Bill Breaks - Ben Valdez, Tax Notes ($):
Faulkender, speaking on a July 23 webinar hosted by the National Tax Association, said the bipartisan support that followed President Trump’s first “no tax on tips” proposal on the campaign trail is one indicator that the measure will survive its 2028 expiration date. Several Republicans and Democrats proposed varying versions of a tax break for tipped workers following Trump’s pledge.
“The purist in me would like to see them expire. The politician in me recognizes they’re likely going to stay,” Faulkender said.
In addition to the deduction for tipped wages, the One Big Beautiful Bill Act provided deductions for overtime pay and car loan interest and for seniors age 65 and older — all tied to the 2028 expiration date.
“The purist in me would like to see them expire. The politician in me recognizes they’re likely going to stay,” Faulkender said.
In addition to the deduction for tipped wages, the One Big Beautiful Bill Act provided deductions for overtime pay and car loan interest and for seniors age 65 and older — all tied to the 2028 expiration date.
State Taxes
State Corp. Tax Revenue Cooling After Years Of Growth - Paul Williams, Law360 Tax Authority ($):
State corporate income tax revenue is declining in a majority of states this year, signaling that collections are softening after having reached record highs following federal tax changes in 2017 and an infusion of federal aid to businesses during the COVID-19 pandemic.
Through May, 30 of the 44 states that levy corporate income taxes had reported declines since July 2025 in collections in real terms, which account for inflation, according to a report in June from the Urban Institute think tank. The report said the median state experienced a 10.6% year-over-year drop in corporate tax revenue while collections among states collectively were down 1.7%.
Through May, 30 of the 44 states that levy corporate income taxes had reported declines since July 2025 in collections in real terms, which account for inflation, according to a report in June from the Urban Institute think tank. The report said the median state experienced a 10.6% year-over-year drop in corporate tax revenue while collections among states collectively were down 1.7%.
Blogs & Bits
At Parker Tax Publishing, read a deep dive on the new IRS automatic penalty exemption program.
At the Tax Foundation blog, read a deep dive on the World Health Organization's excise taxes.
And at the Cato Institute, read a deep, critical dive on the history of wealth taxes.
What Day Is It?
It's National Amelia Earhart Day! For the famed aviator's 129th birthday.
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