Tax News & Views Energy Credits Roundup

Tax Bill

Schumer to Bring $79 Billion Tax Bill to Senate Floor - Cady Stanton and Doug Sword, Tax Notes($):

The Senate is poised to take an initial procedural vote on the House-passed tax bill by the end of the week, forcing Republican leaders to fulfill their promise to kill the legislation.

Senate Majority Leader Charles E. Schumer, D-N.Y., filed cloture on the $79 billion Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) on July 29. That sets up a procedural vote on the bill on August 1 before the chamber leaves for a five-week recess.

Stalled Business Tax Break Bill Set for Senate Vote This Week - Chris Cioffi, Bloomberg Tax($):

Senate Majority Leader Chuck Schumer Monday teed up a Senate test vote on the long-stalled $78 billion business tax break bill, readying it for floor action later this week.

The bill, brokered by Senate Finance Chair Ron Wyden (D-Ore.) and House Ways and Means Committee Chair Jason Smith (R-Mo.), contains breaks for research and development, interest, and capital expensing.

Energy Credits

Energy Tax Credit Transfer Deals Are Projected to Accelerate - Caleb Harshberger, Bloomberg Tax:

Demand for energy tax credits is accelerating, with transferred credits forecasted to total between $20 billion and $25 billion this year, a report from energy tax credit marketplace Crux found.

The 2022 tax-and-climate law known as the Inflation Reduction Act allows energy developers to effectively sell tax credits to buyers through tax credit transfers. Halfway through the year, Crux estimates between $9 billion and $11 billion energy tax credit transfer deals have been done so farand expects the pace to pick up as the end of the year approaches and more companies get on board with buying credits.

Clean Energy Tax Credit Sales Could Hit $25B, Report Says - Kat Lucero, Law360($). "Total sales of clean energy tax credits could reach as high as $20 billion to $25 billion this year, signaling a flourishing marketplace for credit sales authorized by the 2022 climate law, according to a midyear report released Monday by a climate tech startup firm."

CTA/BOI

Biz Groups Call Corp. Transparency Act Unconstitutional - Natalie Olivo, Law360($). "The U.S. government has failed to show how the Corporate Transparency Act meets narrow exceptions to the Fourth Amendment's search warrant requirements, a group of small businesses told a Michigan federal court Friday in contending that the statute is unconstitutional."

Corporate Pushback Mires US Anti-Money Laundering Disclosures - John Woolley, Bloomberg Tax($):

Businesses worried about the cost of a federal requirement to report their owners’ identities see one lawsuit as a possible blueprint to escape enforcement—even as officials insist those concerns are misplaced.

Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.) said in an interview that ongoing legal challenges to the Corporate Transparency Act betray “a fundamental misunderstanding of the national security problem” targeted by the law—namely, money laundering and tax evasion done through anonymous shell companies. Business associations across the country, however, say they’re filing suit because their members are being caught in the crossfire.

Utah Biz Groups Latest To Challenge Corp. Disclosure Law- Natalie Olivo, Law360($). "Several small-business associations in Utah became the latest group to challenge the Corporate Transparency Act's disclosure requirements, telling a federal court Monday the statute violates several constitutional provisions, including the guarantee of due process."

Tax Court Confirmation

S enate Confirms Second Tax Court Judge In A Week - Asha Glover, Law360($):

The U.S. Senate confirmed its second U.S. Tax Court judge in a week on Monday, voting to approve the nomination of a special trial judge to fill a vacancy on the court.

By a 73-13 vote, the Senate confirmed Adam B. Landy to a 15-year term on the Tax Court bench. The move came after the Senate on Friday confirmed Kashi Way, a legislation counsel at the Joint Committee on Taxation, to serve on the court.

Chevron

Chevron's Fall A 'Nothingburger' For SALT Cases, Atty Says - Paul Williams, Law360($). "Denver - The U.S. Supreme Court's overturning of the Chevron deference doctrine may amount to a "nothingburger" for state tax litigation purposes due to other doctrines that already guide courts on how to address ambiguous tax laws, a practitioner said Monday."

Loper Bright Is a 'Nothingburger' for State Purposes, Panelist Says - Amy Hamilton, Tax Notes($):

The Supreme Court’s decision overturning Chevron deference is fascinating but is a "nothingburger" for state tax administration purposes, according to a former top administrator behind the Colorado reporting requirements at issue in Direct Marketing Association v. Brohl.

In Loper Bright Enterprises v. Raimondo, the Court overruled its 1984 opinion in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc. by holding in part that courts cannot simply defer to an agency if a statute is ambiguous.

Tax Compliance
Tax Noncompliance Detected Among IRS Employees and Contractors - Benjamin Valdez, Tax Notes($). "Some IRS employees and contractors haven’t been on top of their tax bills, according to an IRS watchdog."

Jewelry Dealer Can Dodge Fraud Penalty, but Not Deficiency - Erin McManus, Tax Notes($). "In a July 23 order in [NAME REDACTED], Tax Court Judge Ronald L. Buch granted the IRS’s motion for summary judgment that Simon Jalas be held liable for a $1.84 million deficiency and additions to tax for failure to file, pay, and make estimated tax payments for tax years 2008-2011. But Buch denied the agency’s motion to impose a fraud penalty because the IRS couldn’t establish fraudulent intent by clear and convincing evidence.

How Tax Opinions Help Solidify Tax Positions And Prevent Penalties - Robert W. Wood, Forbes:

With a big or tricky transaction or a major income item, someone may tell you that you should get a tax opinion. But what does that mean? A tax opinion can be written about any subject. It is formal written advice about your own facts and tax circumstances, whatever they are. You might have settled some litigation and received money, or paid big legal fees. You might have moved states, liquidated a business, sold or exchanged stock, assets or crypto, or had an involuntary conversion or casualty loss.

You might have received a legal settlement you hope is tax free because of physical injuries or sickness. You might be claiming that your stock sale proceeds are tax exempt as qualified small business stock under section 1202 of the tax code. Whatever your situation, you may want formal tax advice about the strengths and weaknesses of your position before you file your tax return.

5 new warning signs your ERC claim might be wrong - Kay Bell, Don't Mess With Taxes:

The Internal Revenue Service says another major announcement about the Employee Retention Credit (ERC), the tax break created to help companies weather the COVID-19 pandemic’s economic challenges, is on the way.

But until then, the agency is urging businesses to re-evaluate their filings. And it has announced five new ERC red flags that could indicated your claim won't pass IRS examiner muster.

IRS shares more warning signs of incorrect claims for the Employee Retention Credit; urges businesses to proactively resolve erroneous claims to avoid penalties, interest, audit, irs.gov:

As the Internal Revenue Service intensifies work on the Employee Retention Credit, the agency today shared five new warning signs being seen on incorrect claims by businesses.

The new list comes from common issues the IRS compliance teams have seen while analyzing and processing ERC claims. The new items are in addition to seven problem areas the IRS previously highlighted.

What Day is it?

Another day to celebrate good food, happy National Cheesecake Day!

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Jenny McGarry