Key Takeaways
- Representative Arrington's tax pitch.
- Republicans to meet at Mar-a-Lago to strategize tax plan.
- $20,000 SALT Cap?
- Bill introduced to repeal certain clean energy credits.
- Final Regs released on partnership basis shifting.
- IRS issues guidance on clean vehicle credit.
- IRS Free File opens today.
- IRS Commissioner nominee faces scrutiny.
- National houseplant appreciation day!
Incoming Administration & Taxes
Arrington ‘accidentally’ pitches raising taxes in presentation to House GOP - Laura Weiss, John Bresnaham, Melanie Zanona, and Jake Sherman, Punchbowl News:
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But the idea of raising corporate taxes somehow made its way into the Texas Republican’s presentation. Arrington told us there was a “mistake” and he emphasized that such a rate hike “wasn’t even on the table” as part of his presentation. Yet at that Republican Study Committee lunch, Arrington intentionally floated other examples of ways to raise revenue in the tax code. These included clawing back clean energy tax credits from Democrats’ Inflation Reduction Act — a common, though politically fraught, GOP goal — and a SALT cap for corporations. Addressing “corporate SALT” would entail limiting what companies can deduct in state and local income taxes, much like Republicans did for individuals in 2017.
Rival Republican Factions Fight for Trump’s Approval - Richard Rubin, Wall Street Journal:
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While the House is forging ahead with the one-bill plan using the process known as budget reconciliation, Senate Republicans aren’t sold on the concept at all. Instead, they want to do a quick bill with border-security and defense money, then come back to the tax bill—also through reconciliation—later this year. The process lets fiscal bills pass with a simple majority in the Senate, rather than the 60 votes required of most legislation.
Legislative Choices And Taxpayer Advocate Concerns - Renu Zaretsky, Tax Policy Center. "TPC’s Howard Gleckman considers the GOP debate over whether President-elect Trump’s ambitious tax, border, and energy policies will be tackled through one sweeping reconciliation bill or divided into two bills. While President-elect Donald Trump and some in the GOP leadership prefer a singular approach to streamline passage, no matter the approach, intraparty divisions over spending cuts will likely complicate progress."
A $20,000 SALT Cap Would Be Costly, Mostly Benefit High-Income Households - Howard Gleckman, Forbes:
By contrast, those making between about $430,000 and $1 million (the highest-income 95% to 99% of households) would get a tax cut averaging nearly $1,400, or about 0.3% of their after-tax income. The nearly 60% of that group who would get some tax cut would see their taxes decline by an average of about $2,300.
Perry Announces Three Bills to Repeal Clean Energy ‘Handouts’ - Tax Analysts, Tax Notes ($). "The Restoring Energy Market Freedom Act, the Restoring Fuel Market Freedom Act, and the Restoring Vehicle Freedom Act would “repeal various tax handouts for so-called ‘renewable energy sources,’ electric vehicles, and the ethanol industry,” Rep. Scott Perry, R-Pa., said in a January 9 release."
Final and Proposed Regs
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The final regulations identify certain partnership related-party basis adjustment transactions, and substantially similar transactions, as TOIs. They apply to related partners and partnerships that participated in the identified transactions through distributions of partnership property or the transfer of an interest in the partnership by a related partner to a related transferee. The affected taxpayers and their material advisors are subject to the disclosure requirements for reportable transactions.
Final Basis Shifting Reporting Regs Released - Kristen Parillo, Tax Notes ($):
Those who fail to comply with their reporting or list maintenance obligations are subject to various penalties and tolling of the statute of limitations on assessment.
Guidance on Commercial Clean Vehicle Credit issued - Mary Katherine Browne, Tax Notes ($):
Treasury, IRS issue proposed regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions - IRS:
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The proposed regulations also provide guidance relating to the increased catch-up contribution limit under the SECURE 2.0 Act for certain retirement plan participants. Affected participants include employees between the ages of 60-63 and employees in newly established SIMPLE plans.
IRS
IRS Free File Is Set To Open On January 10 For Eligible Taxpayers - Robert Farrington, Forbes:
For taxpayers with an adjusted gross income of $84,000 or less, IRS Free Tax Software provides easy to use options for tax filers. This year, eight private-sector partners are participating in the program, with one offering support in Spanish.
Doubling The SALT Cap Would Be Expensive - Remu Zaretsky, Tax Policy Center:
Warren Presses IRS Pick On Employee Tax Credit Involvement - Asha Glover, Law 360 Tax Authority ($):
Tax Trouble
Aurora man indicted for defrauding surveying company and $2.3 million from COVID-19 relief programs - IRS (defendant name omitted):
The indictment further alleges that Defendant participated in a scheme to defraud the Small Business Administration and others to obtain emergency COVID-19 relief funds totaling over $2.3 million during the pandemic.
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