Key Takeaways
- Lawmakers propose new tax benefit for student-athletes.
- IRS conservation easement overhaul raises questions among practitioners.
- Enforcement efforts focusing on nonprofits, compliance.
- IRS offers new voluntary disclosure offer.
- National Bow Tie Day!
Congress Update
All Eyes on Lame Duck for Last-Chance Tax Package in 2026 - Cady Stanton, Tax Notes ($):
Movement on a bipartisan collection of tax administration policies in the Senate has directed attention to the post-midterm period for a possible tax package, but not without wild cards to factor in first.
Several widely supported tax measures, from a tax administration bill to a revival of the expired work opportunity tax credit, could come together in a tax extenders package at the end of the year. But tax watchers and lawmakers alike say midterm results, congressional leadership buy-in, and limited floor time are the major hurdles determining whether a collection of tax measures could gain support.
Several widely supported tax measures, from a tax administration bill to a revival of the expired work opportunity tax credit, could come together in a tax extenders package at the end of the year. But tax watchers and lawmakers alike say midterm results, congressional leadership buy-in, and limited floor time are the major hurdles determining whether a collection of tax measures could gain support.
Student-Athlete Investment Accounts Bill Would Offer Tax Perks - Torrence Banks and Macon Atkinson, Bloomberg Tax:
A bipartisan group of lawmakers is working on legislation to curb the taxes on earnings from endorsement deals after a legal change allowed student-athletes to license their personas.
The HUSTLE Act (H.R. 9568), sponsored by Reps. Greg Steube (R-Fla.) and Brendan Boyle (D-Pa.), would create tax-advantaged investment accounts for student-athletes who enter into “Name, Image and Likeness” agreements that would allow eligible deposits from their earnings to grow tax free, creating a similar structure to the popular 529 college savings program.
Approved contributions would be shielded from federal income taxes up to the annual gift tax exclusion limit of $19,000. Once their sports careers end, athletes would have the options to withdraw funds at the lower, long-term capital gains tax rates or transition funds into a retirement account.
The HUSTLE Act (H.R. 9568), sponsored by Reps. Greg Steube (R-Fla.) and Brendan Boyle (D-Pa.), would create tax-advantaged investment accounts for student-athletes who enter into “Name, Image and Likeness” agreements that would allow eligible deposits from their earnings to grow tax free, creating a similar structure to the popular 529 college savings program.
Approved contributions would be shielded from federal income taxes up to the annual gift tax exclusion limit of $19,000. Once their sports careers end, athletes would have the options to withdraw funds at the lower, long-term capital gains tax rates or transition funds into a retirement account.
Easing on Easements?
Uncertainty Abounds Following IRS’s Shift in Easement Strategy - Kristen Parillo, Tax Notes ($):
The IRS’s pivot on conservation easements is a positive first step, but how the new centralized office will be structured and whether taxpayers can rescind pending settlement offers are open questions, according to tax professionals.
“It’s an overall positive development, but in the short term it’s created a lot of uncertainty for IRS counsel, practitioners, partnerships, and investors, who don’t have any actionable intel right now,” Andy Steigleder of Kostelanetz LLP told Tax Notes.
The tax community was caught off guard by the IRS’s August 19 announcement that it is creating an Office of Conservation Easements and ending uniform settlement offers aimed at clearing the backlog of syndicated easement cases. “It was very abrupt, to say the least,” said Steigleder.
“It’s an overall positive development, but in the short term it’s created a lot of uncertainty for IRS counsel, practitioners, partnerships, and investors, who don’t have any actionable intel right now,” Andy Steigleder of Kostelanetz LLP told Tax Notes.
The tax community was caught off guard by the IRS’s August 19 announcement that it is creating an Office of Conservation Easements and ending uniform settlement offers aimed at clearing the backlog of syndicated easement cases. “It was very abrupt, to say the least,” said Steigleder.
4 Factors That May Decide Success Of IRS Easement Office - Kat Lucero, Law360 Tax Authority ($):
The new office appears to be a distillation of the IRS' approach to policing conservation easement tax abuse. The agency's aggressive enforcement of conservation easements has resulted in hundreds of suits in federal courts and a backlog of cases, according to practitioners.
"I can't imagine people see this as a retreat from enforcement," said Carolyn A. Schenck, formerly an attorney at the IRS Office of Chief Counsel. "I see it more as a dynamic maturing and institutionalizing of the IRS' approach."
"The announcement recognizes that conservation easement disputes are not a monolithic category of cases," said Schenck, who joined Caplin & Drysdale last year.
"I can't imagine people see this as a retreat from enforcement," said Carolyn A. Schenck, formerly an attorney at the IRS Office of Chief Counsel. "I see it more as a dynamic maturing and institutionalizing of the IRS' approach."
"The announcement recognizes that conservation easement disputes are not a monolithic category of cases," said Schenck, who joined Caplin & Drysdale last year.
Former Trump Adviser to Lead IRS Conservation Easement Office - Erin Schilling, Bloomberg Tax:
Dan Huff, a former legal adviser to President Donald Trump, will lead the IRS’s latest effort to reduce its backlog of syndicated conservation easement cases, an agency official said in an interview Tuesday.
The IRS earlier this month said it is creating an Office of Conservation Easements to coordinate policy, enforcement, and resolution of easement cases. The agency has spent a decade trying to curb abusive easements, a tax scheme that has resulted in billions of dollars in lost tax revenue. Around 1,000 cases are under audit or in Tax Court.
The IRS earlier this month said it is creating an Office of Conservation Easements to coordinate policy, enforcement, and resolution of easement cases. The agency has spent a decade trying to curb abusive easements, a tax scheme that has resulted in billions of dollars in lost tax revenue. Around 1,000 cases are under audit or in Tax Court.
More OBBBA Implementation
Opportunity Zone Incentives Mostly Fund Real Estate, GAO Finds - Jared Serre, Tax Notes ($):
Nearly a decade since the creation of Opportunity Zones, most investments that benefit from the program’s tax incentives are focused on real estate development and other housing projects, a government watchdog found.
Such projects seemingly “work better” with the program’s substantial improvement requirement, compared with investments in operating businesses, according to a report published August 24 by the Government Accountability Office.
The GAO’s findings relied on the results of a survey involving the 56 states and territories eligible for Opportunity Zone incentives, as well as the knowledge of state and local officials and subject-matter specialists, because comprehensive government data on investments is not publicly available, the report noted.
Such projects seemingly “work better” with the program’s substantial improvement requirement, compared with investments in operating businesses, according to a report published August 24 by the Government Accountability Office.
The GAO’s findings relied on the results of a survey involving the 56 states and territories eligible for Opportunity Zone incentives, as well as the knowledge of state and local officials and subject-matter specialists, because comprehensive government data on investments is not publicly available, the report noted.
Trump Account Benefits Race Makes Payroll Vendors Key Players - Brett Samuels, Bloomberg Tax:
Human resource and payroll service providers, like Alight and ADP, are bracing for a central role administering contributions to Trump Accounts as employers weigh incorporating the child savings vehicle as an employee benefit.
Major vendors are poised to step in as the main providers based on existing infrastructure and relationships with large firms. Companies like Alight Solutions LLC and Automatic Data Processing Inc. will be critical in getting money from employers or employee paychecks into Trump Accounts and verifying the eligibility of those accounts.
While many employers are expected to take a cautious approach to implementing the contributions, several large firms have already signaled they intend to match government seed funding for certain eligible children, putting the onus on service providers to get the necessary infrastructure in place in a short time.
Major vendors are poised to step in as the main providers based on existing infrastructure and relationships with large firms. Companies like Alight Solutions LLC and Automatic Data Processing Inc. will be critical in getting money from employers or employee paychecks into Trump Accounts and verifying the eligibility of those accounts.
While many employers are expected to take a cautious approach to implementing the contributions, several large firms have already signaled they intend to match government seed funding for certain eligible children, putting the onus on service providers to get the necessary infrastructure in place in a short time.
Across the Pond
European Commission Seeking a Tax Win - Elodie Lamer and Sophie Petitjean, Tax Notes ($):
Politically, the second semester of 2026 will be a moment of truth for the commission's tax strategy, in which tax objectives are being advanced through nontax legislative proposals. A May report by the General Secretariat of the EU Council identified 12 new cases of tax provisions within nontax proposals, double compared with the previous six months. Those proposals include the 28th regime, the network charges package, and the pan-European personal pension products, which are all to be dealt with by qualified majority and negotiated on an equal footing with the EU Parliament.
The negotiation of the EU long-term budget, which could see the introduction of new own resources, must also be closely monitored. The commission is expected to tweak its proposal for a financial contribution on large companies' turnover, or CORE, by excluding loss-making companies and raising the turnover threshold.
The negotiation of the EU long-term budget, which could see the introduction of new own resources, must also be closely monitored. The commission is expected to tweak its proposal for a financial contribution on large companies' turnover, or CORE, by excluding loss-making companies and raising the turnover threshold.
IRS Enforcement
IRS Focuses Enforcement on Nonprofits, Easing Compliance Burdens - Erin Schilling, Bloomberg Tax ($):
Almost a year into his tenure leading IRS enforcement, Jarod Koopman is using his shrunken workforce to shepherd new civil strategies and refocus the criminal branch.
The IRS compliance strategy hadn’t been updated since 2017 and didn’t have any metrics to show whether revenue agents were successfully collecting taxes owed, Koopman said. And since the IRS lost almost a third of its staff during the Trump administration’s effort to downsize the federal government, Koopman said he’s focused on creating coordinated enforcement strategies that lean on automation and analytics.
“We think of the approach of having the right people at the right place doing the right things,” Koopman, IRS chief tax compliance officer and chief of criminal investigation, said during a Tuesday panel at the Summer Tax Summit in St. Louis.
The IRS compliance strategy hadn’t been updated since 2017 and didn’t have any metrics to show whether revenue agents were successfully collecting taxes owed, Koopman said. And since the IRS lost almost a third of its staff during the Trump administration’s effort to downsize the federal government, Koopman said he’s focused on creating coordinated enforcement strategies that lean on automation and analytics.
“We think of the approach of having the right people at the right place doing the right things,” Koopman, IRS chief tax compliance officer and chief of criminal investigation, said during a Tuesday panel at the Summer Tax Summit in St. Louis.
Owe Taxes? The IRS Is Offering a Deal to Help Scofflaws Pay Up - Erin Slowey and Erin Schilling, Bloomberg Tax ($):
The European Commission has released practical guidance explaining how importers can reduce their carbon border adjustment mechanism obligations to account for free emissions allowances that EU producers continue to receive.
The guidance released August 14 consists of 10 documents, including six sector-specific papers covering cement, hydrogen, fertilizers, iron and steel, aluminum, and electricity. The commission says the series is intended to explain the requirements of the CBAM regulation in nonlegislative language, with a particular focus on operators of installations producing CBAM goods outside the EU.
The guidance released August 14 consists of 10 documents, including six sector-specific papers covering cement, hydrogen, fertilizers, iron and steel, aluminum, and electricity. The commission says the series is intended to explain the requirements of the CBAM regulation in nonlegislative language, with a particular focus on operators of installations producing CBAM goods outside the EU.
Looking Back
When the Tax Man Came for Jefferson and Tax Records Went Public - Joseph J. Thorndike, Tax Notes ($):
The former president’s financial accounting offers a distinctive glimpse of the federal tax system that Congress built during the War of 1812. After years of almost exclusive reliance on customs duties, lawmakers had been forced to impose internal taxes, including excise levies and various forms of property taxation. As a practical matter, that meant federal officials were now engaged in a complex, often intrusive form of tax assessment and collection, quizzing taxpayers on their property and transactions.
And officials were also making some of that information public.
And officials were also making some of that information public.
Blogs & Bits
Why OBBBA’s Tax Impacts Vary By Race And Ethnicity, Aravind Boddupalli, The Tax Policy Center TaxVox blog. "Understanding the sources of these differences can help policymakers assess how individual tax provisions affect families’ economic well-being and address affordability concerns across racial and ethnic groups."
Newly-expanded child care tax breaks could pay off for parents, Kay Bell, Don't Mess With Taxes blog. "The tax code has long offered a variety of dollar-saving help for parents."
Four Ways US Bond Markets Affect Tax Revenue, Andrew Lautz, The Tax Foundation blog. "Policymakers and financial markets are increasingly attuned to rising interest rates on US Treasury bonds, since they can send broader signals on the country’s fiscal and economic health."
What Day Is It?
It's National Bow Tie Day! An especially important day in the tax and accounting world.
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