Biden Set to Unveil $2 Trillion Infrastructure Plan - Andrew Restuccia, Richard Rubin and Tarini Parti. "The White House said the proposal will cost $2 trillion over eight years and would be paid for over 15 years by raising the corporate tax rate to 28% from 21% and increasing taxes on companies’ foreign earnings. The tax changes would revamp or replace much of the international tax structure that Congress built just four years ago in the law signed by then-President Donald Trump."
Also: "On top of all that, the plan would impose a 15% minimum tax on companies’ income as reported on financial statements. Depending on how that provision is written, such a tax could effectively claw back other tax breaks."
A tax on financial statement income - the "book unreported profits" adjustment, inevitably called the "BURP" - was tried in the 1980s. It was a nightmare to administer and was quickly repealed.
If nothing else, this proposal vindicates taxpayers who chose not to undo pass-through structures to take advantage of the 21% corporate rate in 2018.
Biden Plans $2.25 Trillion Spending, Corporate Tax Hikes - Nancy Cook, Ari Natter, and Billy House, Bloomberg. "The program will prove far more complex to enact than the $1.9 trillion pandemic-relief bill signed earlier in March. Republicans are staunchly opposed to tax increases, and the breadth of measures will invite partisan and even internal Democratic battles."
Democrats Threaten Next Tax Bill Over SALT Cap - Jad Chamseddine, Tax Notes ($). "Some Democrats have been hesitant to repeal the cap over concerns that it benefits wealthy Americans. But the three lawmakers argue that it also affects average citizens."
With a slim majority in the House, small groups of lawmakers may be able to hold bills hostage.
UPDATE: The White House released a "Fact Sheet" summarizing the proposals this morning. Scroll to the bottom for the tax provisions, styled as the "Made in America Tax Plan."
Everything You Need to Know About Due Dates for 2020 Taxes - Sonu Shukla, TaxBuzz. "The most important thing to understand about the recent delay in tax filing is that it is totally automatic - meaning that you don't have to apply to take advantage of it. However, there is no extension in terms of the types of estimated tax payments that you may need to send to the IRS depending on your circumstances. Those are still due on April 15, 2021."
Deadline for Making 2020 IRA Contributions Extended to May 17 - Robert D. Flach, The Wandering Tax Pro. "In extending the deadline to file Form 1040 series returns to May 17, the IRS is automatically postponing to the same date the time for individuals to make 2020 contributions to their individual retirement arrangements... "
Issuance of Form 1099-C Didn’t Result in Debt Forgiveness - Tax Notes. "A U.S. district court dismissed an individual’s putative class action suit against a bank for unlawfully issuing a Form 1099-C upon the bank’s decision to discontinue collection of a debt, which according to the individual should have resulted in forgiveness of the debt. The court found that the bank was required by law to file the form even though the debt was not discharged."
Cryptocurrency in Fraud Investigations - Brett Johnson, Eide Bailly. "Although all transactions on a public blockchain are recorded and openly shared, there is no real personally identifiable information. Combine this with the fact that cryptocurrency is still relatively new and not generally accepted, it can be an attractive option for fraudsters."
USDA Unveils Pandemic Assistance for Producers - Kristine Tidgren, Ag Docket:
The Pandemic Assistance for Producers program will also comprise new programs that will “put a greater emphasis on outreach to small and socially disadvantaged producers, specialty crop and organic producers, timber harvesters, as well as provide support for the food supply chain and producers of renewable fuel, among others.” These programs are needed, the announcement explained, because the agency’s review of previous COVID-19 relief “identified a number of gaps and disparities in how assistance was distributed, as well as inadequate outreach to underserved producers and smaller and medium operations.”
Farmland in an Estate – Special Use Valuation and the 25 Percent Test - Roger McEowen, Agricultural Law and Taxation Blog. " The basic idea of the provision is to relieve farm families from having to sell an eligible family farm or business when the income from its present use is insufficient to pay the tax calculated upon its highest and best use."
Related: Transitioning Your Wealth – Potential Tax Policy Changes with the New Administration.
New tax phishing scam targets students, .edu emails - Kay Bell, Don't Mess With Taxes.
The Internal Revenue Service today warned of an ongoing phishing scam in which the perpetrators are targeting education institutions, including students and staff with email addresses ending in the .edu suffix.
...
The suspect emails display the IRS logo and use various subject lines such as "Tax Refund Payment" or "Recalculation of your tax refund payment."
It asks people to click a link and submit a form to claim their refund.
Don't click the link!
People who adopt may benefit from this special tax credit - IRS. "The maximum adoption credit taxpayers can claim on their 2020 tax return is $14,300 per eligible child."
How Well Is the IRS Implementing A Retroactive Unemployment Benefit Tax Break? - Janet Holtzblatt, TaxVox. "What an administrative nightmare! Now that the IRS has developed a solution, I give the agency a solid grade for overall implementation. But it could be more transparent about what it is doing."
She Has a Plan for That: Examining the Ultra-Millionaire Tax - Marie Sapirie, Tax Notes. "The Warren bill would impose a new, annual 2 percent tax on the net value of all taxable assets greater than $50 million and less than $1 billion. For taxpayers with assets exceeding $1 billion, there’s an added 1 percent tax on everything above that amount. And if Congress passes universal single-payer healthcare legislation, the 3 percent tax on taxpayers with assets exceeding $1 billion bumps up to 6 percent."
A CEO Tax Is the Wrong Way to Help Workers - Erica York and Alex Muresianu, Tax Policy Blog. "In some cases, when considering the industry, the company’s market cap, growth trajectories, and other factors, a CEO’s pay may be out of line with what other CEOs in similar positions are paid. But that is a determination better made by shareholders, board members, financial analysts, and the competitive marketplace. Tax policy is not suited for the job."
Celebrate! Today is Manatee Appreciation Day. "All three species of manatees are considered gentle giants, spending most of their time eating, sleeping, and traveling." Sounds like retired partners become manatees.
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