Key Takeaways
- Election Day.
- Mark your calendar for the December 19 Eide Bailly Legislative Update.
- Election results: tax implications.
- SALT cap fight to return, whatever the results.
- Tax history's lessons.
- North Dakota voting on property tax prohibition.
- South Dakota human consumption tax vote.
- Washington state capital gain tax on the ballot.
- Estate planning tips when you have a year to live.
- A GOP primary challenger gets 15+ years for tax crimes.
- American Football Day.
"To me, political campaigns are not sacred events, to be eagerly anticipated and avidly followed. They are brutal assaults on reason." - Arnold Kling, My Campaign-Season Pledge.
This round is nearly over. What will it mean for taxes? Register for our December 19 webinar featuring Mel Schwarz, Eide Bailly's Legislative Affairs Director, and other members of our National Tax Office team, to find out.
What the tax plans of Harris and Trump could mean for you - Julie Zauzmer Weil, Washington Post:
Overall, Trump’s total agenda has been forecast to increase the national debt by $7.75 trillion through 2035, and Harris’s by nearly $4 trillion.
Election Day's tight margins come with tax implications - Chris Cioffi, Bloomberg ($). "Republicans have a good chance to pick up the two seats needed to change the balance of power—now 51-49—in the upper chamber. That would mean a change in leadership for panels like the Senate Finance Committee, just as much of the GOP’s 2017 tax law expires next year. The House is more of a wild card."
The Tax Moves Investors Are Making No Matter Who Wins the Election - Ashlea Ebeling, Wall Street Journal. "It is too early to know for certain how tax policy will shift, and there isn’t much urgency to act in many instances. But there are some cases where making moves before the end of this year could pay off, including certain estate planning moves."
Looking under the radar on 2025 - Bernie Becker, Politico. "The IRS: Key GOP lawmakers have said for a couple years now that they’d love to pull back the tens of billions of new funding that Democrats gave to the tax collector in 2022."
The SALT Deduction Fight Is Coming Back—Whoever Wins the Election - Richard Rubin, Wall Street Journal:
Congress could also block workarounds that let business owners avoid the SALT cap when they pay taxes through their individual returns. Those structures, blessed by the federal and state governments since the 2017 law, reduce revenue by up to $20 billion a year and concentrate the cap’s effects on wage-earners and homeowners. In the next Congress, lawmakers also could consider applying the SALT cap to corporations.
Tax History: What Can History Tell Us About the Next Administration’s Tax Policies? - Joseph Thorndike, Tax Notes Tax History Project:
There aren’t many guardrails on a president’s power to impose tariffs, especially when they’re framed in terms of foreign policy and national security. Sure, the Constitution gives Congress power over tariff policy (and other sources of federal revenue), but lawmakers have long since delegated much of that power to the executive branch — and they don’t seem inclined to take it back.
State taxes on the ballot
2024 State Ballot Measures - Stateside. A comprehensive listing of 2024 state ballot measures.
State Tax Ballot Measures to Watch in 2024 - Tax Foundation. "Initiated Measure 4 is a Constitutional Initiated Measure brought by North Dakota citizens to prohibit the state government and all local taxing entities from assessing a property tax on real or personal property, which could eliminate over $1.5 billion per year in local funding, with the intent that these localities would be made whole by the state. The measure does not, however, establish what revenue options the state could pursue to generate this additional revenue, and alternative sources—like higher income or sales taxes—would be more damaging to North Dakota’s economy than the existing property tax."
Four State Tax Ballot Measures to Watch in 2024 - Richard Auxier, Tax Policy Center:
However, the actual ballot language does not say that. Instead, if approved, the measure would stop the state from “collecting sales or use tax on anything sold for human consumption.” That means it could also exempt cigarettes and other tobacco products from tax. South Dakota levies a $1.53-per-pack tax on cigarettes.
Big State Tax Changes to Watch on the 2024 Ballot - Kelley Taylor, Kiplinger. "As Kiplinger has reported, one of the most closely watched measures is Washington state's Initiative 2109, which would repeal the state's recently implemented capital gains tax."
Estate Planning - Short term, Longer Term.
Some Final Personal-Finance Advice From Jonathan Clements - Wall Street Journal. "Ever since I learned I had cancer and might have just a year to live, I’ve been working like crazy to make sure I bequeath a well-organized estate and leave my family in good financial shape. I’m determined to have as good a death as possible, not least from a financial point of view."
The 2026 Tax Time Machine for Estate Planners - William Stetson, Tax Notes ($). "By deferring the decision to make a taxable gift in 2025 until after we know what Congress will do, clients can make informed choices without unnecessary risks."
Seize the day
IRS Finalizes Seized Property Rules To Include Online Sales - Kat Lucero, Law360 Tax Authority ($):
To determine the minimum sale price of the seized property, the IRS will take into account the expenses of levy and sale, as well as relevant "facts and circumstances," such as the property's marketability, maintenance and restoration costs, and costs to clean up potential toxic waste, according to the rules.
Final regs. modernize process for sale of taxpayers’ property - Martha Waggoner, The Tax Adviser. "The final regulations require sales to occur at the time and place noted in the notice of sale, including online. They also allow payment in the manner specified in the notice of sale or related instructions, which can include electronic payments, credit or debit card payments, or other commercially acceptable and IRS-approved means. Previously, the regulations required payment by check or money order."
IRS Issues Final Regulations on Sales of Seized Property - Caleb Harshberger, Bloomberg ($). "The rules also precluded any IRS revenue officer from participating in the sale of property if that officer was involved in seizing it."
Link: TD 10011
Blogs and Bits
5 tax moves to make this November - Kay Bell, Don't Miss With Taxes. "5. Take or donate your RMD: If you’re a septuagenarian facing required minimum distribution (RMD) by Dec. 31, make sure you have things in place to get that amount by year’s end. If you miss it, you’ll face a penalty."
Diversion of Trust Fund Taxes Results in Taxable Income to Individual Diverting the Taxes - Parker Tax Pro Library. "The Office of Chief Counsel advised that, when an individual diverts trust fund taxes for whatever reason, including to pay personal or business expenses, the diverted taxes are taxable income to the individual and must be reported on the individual's return for the tax year in which the diversion occurs."
In other words, the IRS doesn't agree with the idea that you are just "borrowing" withheld taxes when you don't remit them on behalf of your employees.
Court Stops Texas Professional from Organizing and Selling “Tax Plans” To Deduct Personal Expenses - Ronald Marini, The Tax Times. "According to DoJ, The U.S. District Court for the Northern District of Texas entered permanent injunctions on November 1, 2024 against Charles Dombek and The Optimal Financial Group LLC barring them from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses or assisting in the creation of 'captive' insurance companies."
How (not) to use artificial intelligence at Tax Court - Jeremy Wells, Empowering Tax Professionals. "The US Tax Court struck a petitioner’s pretrial memorandum from the record when the judge discovered it included citations to nonexistent court cases, appearing to be artificial intelligence hallucinations. Despite the infraction, the court spared the petitioner and counsel from monetary punishment, instead taking the opportunity to discuss the effects of generative AI on legal and judicial proceedings."
Tax Crime Watch, Primary Challenger Edition.
Trump Primary Challenger Sentenced To Over 15 Years On Tax Charges - Peter Reilly, Forbes:
The case that did go somewhere is the United States of America v John Anthony Castro in the United States District Court For the Northern District of Texas in Fort Worth. The indictment filed January 3, 2024 charged Castro with 33 counts of "Aiding and Assisting in the Preparation and Presentation of a False and Fraudulent Return". Castro opted to be tried by the judge rather than a jury. Judge Terry Means, who was appointed by the elder George Bush, found Castro guilty on all 33 counts. On October 30, 2024 Judge Means sentenced Castro to 188 months in prison followed by one year of supervised release. A condition of the supervised release is the payment of restitution in the amount of $277,243.
What day is it?
It's Election Day, of course. It's also American Football Day, honoring a little-known sport played in certain high schools and colleges. I understand that there is a professional league as well.
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