Tax News & Views Tell a Joke Roundup

Programming Note: Joe Kristan will be hosting a free Eide Bailly webinar next Tuesday, August 20, on Tax Planning Tips: Key Business & Individual Considerations. Register here.

Second Round - ERC Disclosure Program

IRS provides details of second Employee Retention Credit Voluntary Disclosure Program; program for improper claims open through Nov. 22 - irs.gov:

WASHINGTON — The Internal Revenue Service urged businesses that have received Employee Retention Credit payments to recheck eligibility requirements and consider the second Employee Retention Credit (ERC) Voluntary Disclosure Program (VDP) to resolve incorrect claims without penalties or interest.

The second ERC-Voluntary Disclosure Program will run through Nov. 22, 2024, and allow businesses to correct improper payments at a 15% discount and avoid future audits, penalties and interest.

ERC Voluntary Disclosure Program Reopens - Benjamin Valdez, Tax Notes($):

The IRS has reopened its voluntary disclosure program for employee retention credit claims.

The program, which allows taxpayers to self-report ERC claims for tax year 2021 that they think might be improper, will run through November 22, the IRS said August 15. In Announcement 2024-30, 2024-36 IRB 1, the agency said businesses using the voluntary disclosure program must repay 85 percent of the credit they received, and the agency will waive any penalties, interest, and future audits.

Eide Bailly is hosting a free webinar on Monday, August 19 to discuss ERC developments, Helping Clients Navigate the Employee Retention Credit Mess | Session One. Register today!

Conservation Easements in the Courts

IRS Nix Of $52M Easement Deduction Invalid, Donor Says - Anna Scott Farrell, Law360($). "An Alabama partnership asked the U.S. Tax Court to reverse an Internal Revenue Service adjustment that cut its roughly $52 million deduction for its donation of a conservation easement, saying, among other things, that the IRS defied the Administrative Procedure Act."

Partnership's $47M Easement Deduction Is Fraud, IRS Says - Anna Scott Farrell, Law360($). "A North Carolina partnership lied and hid details related to a fraudulent conservation easement donation for 2018, the Internal Revenue Service told the U.S. Tax Court, saying the partnership is wrong in claiming the IRS improperly slashed its almost $47 million corresponding tax deduction."

More COVID Fraud

Ga. Man Accused Of Trying To Steal $1.9M In COVID Funds - Anna Scott Farrell, Law360($). "A Georgia man was indicted in a scheme to steal $1.9 million in pandemic relief money and accused of wire fraud, submitting fraudulent federal tax returns and stealing dozens of Social Security numbers, the U.S. Department of Justice announced Wednesday."

Partnership Taxation

Tips For Tax Equity-Tax Credit Transfers That Pass IRS Muster - Ian Boccaccio and Michael Messina, Law360($):

The Internal Revenue Service has recently increased scrutiny around the economic substance of complex partnership structures.
...
On April 30, the taxpayer filed an appeal in the U.S. Court of Appeals for the Tenth Circuit, but the lower court's interpretation and application of the economic substance doctrine codified in Internal Revenue Code Section 7701(o) provides a warning signal for structures that could be perceived as taking advantage of tax law with the sole intent of maximizing tax benefits, rather than having any legitimate business purpose.

Happy Birthday, IRA

Tax Pros Navigate Chaos, Rewards In Climate Law's 2nd Year - Kat Lucero, Law360 ($):

Energy tax attorneys have been knee-deep in project finance deals for the past year since the Inflation Reduction Act of 2022 triggered a flurry of clean energy investments, but the work, they say, has been fulfilling as part of broader efforts to save the environment.

The historic climate law — which will finish its second trip around the sun Friday — has in a relatively short period rapidly transformed the way clean energy projects are financed. Policy changes have so far generated more than $265 billion in major private sector investments, according to the White House, largely thanks to the expansion of existing tax credits and new mechanisms to capitalize on those incentives that are expected to boost more investments in the industry.

Final Regs have been Corrected

IRS Corrects Regs For Digital Asset Brokers, Energy Credits - Jack McLoone, Law360($). "The Internal Revenue Service issued corrections to three sets of final regulations Thursday, including those related to digital asset brokers and two clean energy tax credit provisions."

CAP Program

CAP Program Opens to Privately Held Corporations - Chandra Wallace, Tax Notes($):

The IRS will soon open applications for its 2025 compliance assurance process, expanding the scope of the program to include privately held C corporations and increasing its information gathering for cross-border activities.
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CAP is a voluntary cooperative prefiling program for large corporations, allowing them to work with IRS review teams to identify and resolve potential issues before filing their tax returns.

Heavy Highway Vehicle Use Tax Return due date

IRS reminds truckers of upcoming tax deadline - irs.gov. "The Internal Revenue Service reminds those who operate large trucks and buses that the deadline for filing Form 2290, Heavy Highway Vehicle Use Tax Return PDF, is Tuesday, Sept. 3, 2024, for vehicles used in July 2024. The usual Aug. 31 deadline is delayed until the next business day because it falls on a Saturday this year."

Trump's Proposed Tax Policy

TPC: Trump Tariffs Would Raise Household Taxes And Slow Imports - Howard Gleckman, Tax Policy Center:

A worldwide 10 percent tariff and a 60 percent tariff on Chinese goods proposed by Republican presidential candidate Donald Trump would lower average after-tax incomes of US households in 2025 by about $1,800, or 1.8 percent, according to a new analysis by the Tax Policy Center. They’d reduce imports into the US by about $5.5 trillion, or 15 percent, from 2025–2034.

TPC also analyzed the much more modest tariffs President Biden enacted starting last May. They have a very small impact on federal revenue or household incomes.

What Day is it?

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Tax News & Views Tell a Joke Roundup

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Jenny McGarry