Tax News & Views Weekly Roundup: Tax News & Views Weekly Roundup: Data Centers, Credits and Pied-à-Terre Planning

In Congress

Wyden proposes new taxes on data centers - Bernie Becker, Politico:

He also wants to impose a low single-digit excise tax that would generate new revenue from data centers, which have prompted concerns around the country about environmental impacts and the rise of artificial intelligence.

It’s still less aggressive of an approach toward data centers as some of Wyden’s colleagues, such as Sen. Bernie Sanders (I-Vt.), who along with Rep. Alexandria Ocasio-Cortez (D-N.Y.) has proposed a nationwide moratorium on new data center construction.

Preparing for Next Year

Opportunity Zone Investors Try to Lower Tax Bills Ahead of 2027 - Erin Schilling, Bloomberg Tax ($):

Opportunity Zone investors who owe capital gains taxes at the end of the year are mulling advice from tax practitioners on ways to ease the sticker shock of their bills.

Tax planners want to make sure investors have cash on hand to make that payment and recommend using appraisers who could help figure out ways to lower the value of investors’ interests in opportunity zone funds, largely through estate and gift tax valuation discounts.

Trump Update

Union representing IRS workers asks judge to block Trump tax audit immunity deal - Alanna Durkin Richer, Yahoo Finance:

The labor union representing Treasury Department and Internal Revenue Service workers asked a judge Thursday to block a sweeping tax audit immunity agreement for President Donald Trump, arguing it would force career employees to choose between following a political order and abiding by the law.

The group joined a lawsuit filed in May that sought to block the proposed $1.8 billion "Anti-Weaponization Fund," which the Trump administration later scrapped after bipartisan pushback. The updated lawsuit, filed by legal advocacy group Democracy Forward, now also targets the audit immunity deal conferred on the president, his sons and the Trump Organization, which remains in place.

New Guidance

Initial Guidance Issued on Paid Leave Credit, With More to Come - Trevor Sikes, Tax Notes ($):

Treasury and the IRS have provided clarity on the One Big Beautiful Bill Act’s additional method for employers calculating the paid family and medical leave tax credit.

Notice 2026-28, 2026-34 IRB 1, issued August 5, also expressed the government’s intent to issue proposed regulations that will provide further guidance in accordance with the notice’s contents.

The section 45S credit, created by the Tax Cuts and Jobs Act, offers a tax credit to employers that provide paid family and medical leave that’s equal to a percentage of wages paid to qualifying employees.

IRS to Issue Regulations on Saver’s Match Retirement Initiative - Brett Samuels, Bloomberg Tax ($):

The Treasury Department intends to propose regulations around the Saver’s Match program, which will offer up to $1,000 in government money for certain low-income individuals who contribute to retirement accounts beginning next year.

The IRS said in a notice published Friday it would address myriad issues around the Saver’s Match, which was enacted as part of the SECURE 2.0 Act in 2022 and will take effect Jan. 1. The agency signaled plans to propose rules around income tax with respect to the match, eligibility for the program, how to claim a contribution, reporting requirements, and tax treatment.

Illness and Taxes

The Tax World Is Ready for Cyclospora Recalls - Nathan J. Richman, Tax Notes ($):

Reports that thousands of people have been sickened by a produce-borne pathogen that induces substantial gastrointestinal distress have raised questions about whether the Food and Drug Administration should issue recalls. There’s also the question of the tax effects of recalls and civil suits on the businesses that sold the tainted products.

Depending on the specifics of any resolution, the sickened taxpayers may be able to take advantage of the income exclusions in section 104 regarding compensation for sickness if they obtain compensation from the business that sold the produce.

Global Taxes

Ireland Scoops Extra $1.49 Billion From Global Minimum Tax Debut - Ryan Hogg, Bloomberg Tax ($):

Ireland collected around €1.1 billion ($1.3 billion) worth of taxes from large companies in July as it introduced the global minimum tax.

The first large tranche of receipts from the country’s 15% top-up tax made up the vast majority of the €1.3 billion ($1.49 billion) the country collected in corporation taxes last month, according to figures released Thursday by the Department of Finance.

European Countries Fear Backdoor U.N. Tax Convention Updates - Elodie Lamer, Tax Notes ($):

Several U.N. countries, particularly European ones, said they want to ensure that the future Conference of the States Parties does not acquire authority to impose new substantive obligations on member states.

Ensuring a proper governance structure for the Conference of the States Parties will ensure it stands the test of time, making it "important that we get this right from the outset,” said delegate Michael Braun, counselor at Germany’s permanent mission to the U.N. He was speaking at the August 6 meeting of the fifth session of the committee charged with negotiating the U.N. tax framework convention.

Crocs Has a Trick for Dodging Taxes: a Tiny Office in Malta - Jesse Drucker and Dylan Freedman, The New York Times ($):

Accounting firms present the Maltese maneuvers as legal business transactions. But the lack of a business purpose beyond dodging taxes could make them vulnerable to legal challenges by the Internal Revenue Service. The agency is increasingly attacking strategies that it says lack “economic substance.” Companies work hard to manufacture the appearance of a rationale beyond tax avoidance, Mr. Hamersley said.

State and Local

NYC’s Pied-à-Terre Owners Hunt for Creative Ways to Dodge New Tax - Rebecca Picciotto, The Wall Street Journal ($):

Mayor Zohran Mamdani’s tax on luxury pieds-à-terre has set off a superstorm among the city’s wealthiest homeowners. The new levy will apply to homes worth $5 million or more and to co-ops and condos worth $1 million or more where the owner isn’t a primary resident of the city. The rollout has been messy, with some New Yorkers saying they have been mistakenly targeted.

Actual part-time city dwellers are looking for ways to reduce or get out of the new tax. They are pursuing a number of exemptions, such as proving that an immediate family member lives in the home, or that it is rented out long term.

“People call with creative solutions, only to get angry when I say it doesn’t work,” said Goodman, who advises high-net-worth individuals for the financial consulting firm Armanino.

Blogs & Bits

Tariff Refunds Have Wiped Out Tariff Revenue Since May, Guy Cardwell, Erica York, The Tax Foundation. "While small on their own, the net outflows illustrate a broader problem with President Trump’s tariff regime: legally uncertain and chaotic policy creates instability for government revenues and for the people and businesses trying to plan investment and hiring decisions."

Delayed IRS Tax Gap Estimates Could Obscure Policy And Staffing Impacts, Barry Johnson, Tax Policy Center TaxVox blog. "IRS leadership should ensure that staff have sufficient resources and professional independence to apply the best possible science to improve tax gap measures for all uses, while continuing scheduled releases."

5 tax moves to make this August, Kay Bell, Don't Mess With Taxes. "If some these tax tasks apply to you and you deal with them now, you can chill during the rest of the season’s last lazy, hazy days."

What Day Is It?

Lighthouse

It's National Lighthouse Day! As someone from the Great Lakes region of the Midwest, I appreciate the importance of a beacon on a stormy night...and the beauty and elegance they add to our coastlines.