Key Takeaways
- Hydrogen tax rules.
- Trump tax proposals.
- IRS to nix Form 944.
- Corporate Transparency Act.
- Proposed regs on excise tax for drugmakers.
- National Write to Congress Day!
Clean Hydrogen
Biden administration releases long-awaited hydrogen tax rules - Brian Dabbs & Christa Marshall, E&E News by Politico:
The final guidance changes several provisions from a proposal issued last year, including allowing hydrogen made from some nuclear plants that avoid retirement to obtain credits. The rule supports use of carbon capture and renewable natural gas, but also largely keeps in tact three “pillars” backed by environmentalists that require developers to use new clean energy added to the grid to produce hydrogen.
U.S. Department of the Treasury Releases Final Rules for Clean Hydrogen Production Tax Credit - U.S. Department of the Treasury:
The final rules announced today clarify how producers of hydrogen, including those using electricity from various sources, natural gas with carbon capture, renewable natural gas (RNG), and coal mine methane can determine eligibility for the credit. To qualify for the full credit, projects must also meet prevailing wage and apprenticeship standards, continuing the Biden-Harris Administration’s commitment to put workers at the center of the clean energy economy and ensure clean energy jobs are good-paying jobs.
Incoming Administration & Taxes
Movement on Trump Tax Proposals Is Reconciliation Wild Card - Doug Sword & Cady Stanton, Tax Notes ($):
As if extending the Tax Cuts and Jobs Act, with its $4.6 trillion estimated cost, weren't a heavy enough lift for 2025, the added Trump proposals will have to vie with a GOP caucus increasingly worried about the nation’s $36 trillion debt. What can and can’t be done may well be determined by the outcome of a clash between Republicans over how to score tax proposals: Some say extending current tax policy and enacting new economy-growing tax provisions don’t have to be paid for, while others say spending cuts and deregulation must be the priority.
IRS Updates
IRS, Treasury Float Regs On Excise Taxes For Drugmakers - Anna Scott Farrell, Law 360 Tax Authority ($):
The IRS and Treasury proposed rules for charging excise taxes to drugmakers that refuse to negotiate drug prices with Medicare under requirements of the 2022 tax and climate law, saying the tax only would apply to manufacturers and importers that initially sell the drugs.
In the proposal Tuesday, the Internal Revenue Service and the U.S. Department of the Treasury said that while the Inflation Reduction Act clearly imposes the tax on a "manufacturer, producer or importer" of certain brand-name prescription drugs identified by the federal government, the law fails to define those terms.
IRS to Nix Form 944 for Smallest Employers - Benjamin Valdez, Tax Notes ($):
Beginning in 2026, small employers who now file Form 944, “Employer's Annual Federal Tax Return,” will instead be required to file Form 941, “Employer’s Quarterly Federal Tax Return,” Daniel Lauer of the IRS Small Business/Self-Employed Division said during a January 2 payroll industry call.
Employers with an annual liability for Social Security, Medicare, and withheld federal income taxes of $1,000 or less are eligible to file Form 944, but are required to do so only if the IRS notifies them in writing. Otherwise, employers paying wages subject to federal income tax withholding, including tax-exempt organizations, must file Form 941.
Employers with an annual liability for Social Security, Medicare, and withheld federal income taxes of $1,000 or less are eligible to file Form 944, but are required to do so only if the IRS notifies them in writing. Otherwise, employers paying wages subject to federal income tax withholding, including tax-exempt organizations, must file Form 941.
The government filed an application in the Supreme Court asking the Court to stay a nationwide injunction that prevents the enforcement of the beneficial ownership reporting requirements of the Corporate Transparency Act, arguing that the act is valid, the equitable factors favor a stay, and at the very least, the injunction should be narrowed.
Tax Trouble
Former Latino Peace Officers Association fundraiser sentenced for wire fraud conspiracy and tax evasion - IRS (defendant and company name omitted):
Between 2017 and April 2023, Defendant conspired to defraud the Latino Peace Officers Association (LPOA) for his own personal benefit. Defendant, a/k/a “Cody Jones,” would solicit funds from individuals and entities in the District of Nebraska on behalf of LPOA. LPOA donor letters represented that “every penny” of the donations went to athletic programs to keep target youths out of gangs and to other LPOA causes. The LPOA website similarly represented that 100% of donations went to athletic programs for children. As part of the conspiracy to defraud the LPOA, the percentage of LPOA donations Defendant kept for himself increased from 65% of gross donations to 80% of gross donations without LPOA board approval. Defendant spent a significant amount of those funds on himself and others for personal expenses unrelated to business dealings.
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