Tax News & Views Electing Chocolate Roundup

Election

Amid Lofty Campaign Tax Pitches, Focus Veers From 2025 Cliff – Cady Stanton and Doug Sword, Tax Notes ($):

Presidential candidates are promising the world with tax policy pitches on the campaign trail, but lawmakers and former staffers are urging everyone to keep their eye on the ball: the 2025 tax cliff.

Both Vice President Harris and former President Trump have flooded the zone with expensive tax proposals leading up to November, racking up trillions in estimated costs for their plans as part of their appeal to voters, particularly in swing states.

But current lawmakers, deficit hawks, and former taxwriting committee advisers warn that taxwriters will already have a full plate addressing the expiring Tax Cuts and Jobs Act provisions at the end of next year and caution against taking the candidates’ lengthy list of new ideas seriously.

Trump Says He Supports Tax Credit for Caregivers – Dustin Volz, Wall Street Journal:

Donald Trump said he would support a family tax credit for family members who take care of a parent or loved one, a proposal he hasn’t explicitly endorsed before.

“It’s about time that they were recognized, right?” Trump said. “They add so much to our country and are never spoken of, ever ever ever. But they are going to be spoken of now.” Vice President Kamala Harris earlier this month also proposed a new Medicare benefit for in-home eldercare, including health aides.

Trump’s tariffs, explained – Jeff Stein and Kaitlin Brito, Washington Post. “Tariffs have emerged as one of the most important flash points in the 2024 presidential election. Former president Donald Trump has promised massive new duties of at least 10 percent on all imports, characterizing tariffs as a solution to everything from paying off the federal debt to helping solve the nation’s child-care crisis. Vice President Kamala Harris has attacked Trump’s plan as a “national sales tax” that could send inflation soaring and cost the average American family thousands of dollars every year.”

Trump Flirts with the Ultimate Tax Cut: No Income Taxes at All – Andrew Duehren, New York Times.

Former President Donald J. Trump has spent much of the presidential campaign brainstorming new, and sometimes untested, ways to cut taxes. In the election’s final stretch, he raised the possibility of going even further: eliminating income taxes entirely.

During a Fox News segment on Monday, Mr. Trump took questions at a barbershop in the Bronx. When asked if the United States could potentially end all federal taxation, Mr. Trump said the country could return to the economic policies in the late 19th century, when there was no federal income tax.

Clean Energy

The surprising winners — and losers — of America’s clean energy boom – Niko Kommenda, Shannon Osaka, and John Muyskens, Washington Post:

Two years ago, Congress passed the biggest climate bill in U.S. history — the Inflation Reduction Act, which spurred growth in solar panels, batteries and electric vehicles across the country.

Since then, money devoted to clean energy — initially estimated at $369 billion, but with the potential to reach up to $1 trillion — has flowed into almost every state, largely in the form of tax credits.

But this gusher of cash has also created winners and losers, according to a Washington Post analysis of data from the Massachusetts Institute of Technology and the clean energy modeling think tank Rhodium Group.

IRS

CrowdStrike, Carahsoft Made Deal For Software IRS Didn’t Buy (1) – Jake Bleiberg, Bloomberg ($):

Last fall, George Kurtz, the chief executive officer of CrowdStrike Holdings, Inc., gave investors a quarterly financial update that sent shares soaring. Among the details Kurtz highlighted was a major deal to sell cybersecurity tools for use by the US government.

…

But the IRS never bought the software, according to records reviewed by Bloomberg News and people with knowledge of the situation.

Fraud Leaks in IRS Professional Line Led to Millions in Losses – Rebecca Chen, Bloomberg ($). “IRS efforts to stop fraudsters from using a telephone line dedicated to tax practitioners failed to prevent 574 scam returns from being filed, resulting in more than $47 million in losses in a nine-month period ending in April, a government watchdog found.”

IRS Watchdog: Phone Fraudsters Claimed $462 Million in Refunds – Alexander Rifaat, Tax Notes ($). “Impersonators used the IRS’s practitioner priority service (PPS) phone line to claim $462 million in fraudulent refunds in an eight-month period, according to the Treasury Inspector General for Tax Administration.”

IRS Failed to Prevent $47M In Fraud Despite Alert, TIGTA Says – Jack McLoone, Law360 ($). “The Internal Revenue Service failed to detect more than 570 false tax returns that claimed over $47 million in fraudulent refunds despite having been previously alerted to the scheme used to file them, the Treasury Inspector General for Tax Administration [sic] said Friday.”

TITGA Report: Actions Were Not Taken to Timely Strengthen Practitioner Priority Service Telephone Line Authentication Controls

'Magician' Tax Preparer Close to Plea Deal In $100M Case – Pete Brush, Law360 ($). “New York - A New York City-based tax preparer who earned the nickname "the magician," allegedly making $15 million while fraudulently depriving the IRS of $100 million, is in "fruitful" plea talks with prosecutors, a Manhattan federal judge heard Friday.”

Crypto Rapidly Transforming IRS Criminal Cases, Agent Says – Craig Clough, Law360 ($). “Cryptocurrency is altering the size of many criminal cases that federal law enforcement agencies are handling, an Internal Revenue Service criminal investigator told the UCLA Tax Controversy Conference, commenting that over the past three years the agency broke its record for asset seizures three times.”

Disaster Relief

IRS relief now available to flood victims in the Juneau area; multiple deadlines postponed to May 1, 2025 – IRS.

The Internal Revenue Service today announced disaster tax relief for individuals and businesses in the Juneau area of Alaska, affected by flooding that began on Aug. 5, 2024.

Affected taxpayers now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments.

Corporate Transparency Act

Another District Court Denies Injunction in Transparency Act Case – Andrew Velarde, Tax Notes ($):

For the second time in just over a month, a district court is denying a request for a preliminary injunction against the Corporate Transparency Act (CTA), this time from a community association organization.

In Community Associations Institute v. Yellen, the U.S. District Court for the Eastern District of Virginia on October 24 denied the group's injunctive and declaratory relief motion attempting to prevent enforcement of the CTA. The Community Associations Institute (CAI) had alleged that requiring its members to disclose beneficial ownership was not proper under the statute, violated the Administrative Procedure Act, exceeded congressional authority, and was unconstitutional under the First and Fourth Amendments.

In the Courts

IRS Fumbles Verification in $11.1 Million Foreign Penalty Suit – John Woolley, Bloomberg ($). “The IRS failed to show that it followed procedure before assessing $11.1 million in penalties against a taxpayer with allegedly unreported foreign business interests, the US Tax Court said in denying summary judgment.”

Shuttered Texas Tax Prep Business Must Disgorge $733,700 to IRS – John Woolley, Bloomberg ($). “A tax return preparer that the IRS sued for filing false returns and misappropriating electronic filing identification numbers reaped about $733,700 in ill-gotten gains, a Texas federal district court said in agreeing with the federal government.”

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Tax News & Views Electing Chocolate Roundup

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Trina Pinneau