Key Takeaways
- "I think we'll do it February 1,"
- Werfel steps down as IRS Commissioner.
- Trump formally nominates Billy Long to replace Werfel.
- Indefinite hiring freeze put in place at IRS.
- 200-item tax pay-for menu leaked.
- Trump thumbs down on OECD deal.
- "Godfather," deputy sheriff plead guilty to tax crimes.
- Squirrel Appreciation Day.
Trump Promises Tariffs on Canada and Mexico, and Paves Way for Further Trade Action - Ana Swanson, New York Times:
Speaking to reporters from the Oval Office on Monday evening, Mr. Trump said he was thinking of putting tariffs on Mexican and Canadian products because those nations were allowing “mass numbers of people to come in and fentanyl to come in.” Asked when he might put those in place, Mr. Trump said, “I think we’ll do it Feb. 1.”
Commissioner Shuffle, IRS Hiring Freeze
Werfel Makes Rare Early Exit to Facilitate Transition - Benjamin Valdez, Tax Notes ($):
...
IRS Deputy Commissioner Douglas O’Donnell, a longtime agency employee, will assume the role of acting commissioner until the confirmation of Trump’s nominee, former Missouri Rep. Billy Long, who has been criticized by Democrats for promoting employee retention credits.
Trump Nominates Missouri's Billy Long to Serve as IRS Chief - Erin Slowey, Bloomberg ($):
Trump’s decision to nominate Long breaks the traditional mold of tax specialists or experienced managers who have previously led the agency. The IRS has about 100,00 employees, a $12.3 billion budget, and tens of billions in extra cash from the 2022 tax-and-climate law.
100 Days at the IRS: Rules Pause, Workforce and Leader Shakeup - Erin Slowey, Bloomberg ($):
The memorandum will remain in effect for the IRS “until the secretary of the Treasury Department with the director of the Office of Management and Budget and the administrator of the new United States DOGE Service determines that it is in the national interest to lift the freeze,” according to the order he signed Monday.
That won't speed up processing.
First week tax agenda
Republican pay-for menu sparks call to action - Bernie Becker, Politico:
...
Meanwhile, there has been bipartisan concern over how nonprofit hospitals have been operating, while Republicans have been all but telegraphing that they’d be interested in ratcheting up TCJA’s tax on the endowments of rich colleges, meaning it likely wouldn’t be a shock to nonprofit advocates to see those on the menu.
And then there are the potential tax changes that have seemingly been debated for decades, like whether credit unions still deserve an exemption from federal income tax. (The banking industry doesn’t think so, for the record.)
House Budget Republicans eye more than 200 spending cuts, tax changes for major bill - Tobias Burns, The Hill:
SALT options include fixing the $10,000 cap in place, increasing it to $15,000, eliminating the income and sales tax portion of it, and eliminating the deduction altogether. If SALT is scrapped entirely, it would shrink the deficit by about $1 trillion. Total U.S. debt stock stands now at around $36 trillion, though about 20 percent of that is money the government effectively owes itself.
Donald Trump threatens tax war over US multinationals - Peter Foster, Andy Bounds, and Emma Agyemang, Financial Times:
He added that the “list of options for protective measures” should be drawn up “within 60 days”, putting signatories to the OECD pact — including EU member states, the UK, South Korea, Japan and Canada — on notice that Washington intends far-reaching challenges to global tax rules.
Senate GOP rejects House conservative pitch on corporate tax rates - Alexander Bolton, The Hill. "Some conservatives, notably Rep. Chip Roy (Texas), have floated the idea of raising the corporate tax rate by a few percentage points to ensure the budget reconciliation package Congress plans to pass later this year doesn’t add to the deficit."
Record-Breaking Debt Looms Even if Tax Law Expires, CBO Says - Cady Stanton, Tax Notes ($):
The federal debt will rise from 100 percent of GDP in fiscal 2025 to 118 percent in fiscal 2035, surpassing its previous high of 106 percent of GDP set in 1946, according to a Congressional Budget Office report released January 17 that projects federal budget figures through 2035. That projection doesn’t include the cost of any future legislation, such as one or more reconciliation bills that Republicans are planning to pass following their election wins.
Blogs and Bits
Renting your home for a short time could provide tax-free income - Kay Bell, Don't Mess With Taxes. "Tax benefit of very short-term home rental: The tax code says if you rent your residence (or vacation home) for 14 or fewer days in a year, those real estate transactions are tax-free."
Sold Anything Online? The IRS Wants its Cut - Ashlea Ebeling, Wall Street Journal. "Anyone who earned more than $5,000 in 2024 selling tickets, musical instruments or other goods and services online should expect to get a 1099-K tax form this month. Online platforms such as StubHub, Etsy and eBay previously only had to send these forms to users who earned more than $20,000 in most cases."
IRS Forms 1099 Are Key To Your Tax Filing, Here’s What To Know - Robert Wood, Forbes. "You'll want to see any forms the IRS sees. Each Form 1099 is matched to your Social Security number, so the IRS can easily spew out a tax bill if you fail to report one. If you don’t include the reported item you’re almost guaranteed an audit or at least a tax notice if you fail to report a Form 1099."
Supreme Court Litigator, High-Stakes Poker Player, and Tax Felon? - Russ Fox, Taxable Talk. "In reading through the 22-count, 50-page indictment, one can see he played in very high-stakes games in Macau, Beverly Hills, and elsewhere; he had wins and losses of $10 million or more. But the Department of Justice alleges that when he won those winnings they didn’t find their way to his tax returns, and his losses were sometimes paid out of his firm as business expenses."
Watching the Watchmen Watch
Crypto ‘Godfather’ and LASD detective agree to plead guilty to violating civil rights of business rivals and tax crimes - IRS (Defendant names omitted, emphasis added):
Godfather Guy, who has residences in Beverly Hills and Newport Coast, was named this week in a three-count superseding information that charges him with conspiracy against rights, wire fraud and tax evasion. Godfather Guy has been in federal custody since September 2024.
Enforcer Guy, of Chino, an LASD deputy and a former federal task force officer, was separately charged today with conspiracy against rights and subscribing to a false tax return.
...
According to their plea agreements, Godfather Guy hired off-duty LASD deputies to act as his personal enforcers against his enemies. As part of the conspiracy to violate civil rights, Godfather Guy would have the deputies assist him in carrying out extortion, intimidation, setting people up for arrest, and abuse of legal process. One of the deputies Godfather Guy employed was Enforcer Guy, who was assigned to LASD’s Operation Safe Streets Bureau and served as a federal task force officer assigned to the United States Marshals Service’s Pacific Southwest Regional Fugitive Task Force.
That's not very nice.
After securing the illegal warrant, Enforcer Guy tracked down the victim and provided the victim’s address to Godfather Guy. In March 2022, Godfather Guy caused three armed individuals to try to force entry into the victim’s home to steal the laptop. The individuals fled after the victim fired a gunshot in their direction. Afterward, Godfather Guy sent the victim a video of the attempted home invasion robbery.
I hope that when they ran the numbers for Godfather Guy's tax bill, they didn't allow a deduction for hiring the corrupt deputies. The plea agreement tells us that at least one enforcer didn't report his income from the plan.
What day is it?
It's Squirrel Appreciation Day. The beagle will sit this one out.
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