Key Takeaways
- Funding Freeze
- Federal Employee Buyouts
- IRM Transparency
- Tariff Promises
- Transfer Pricing
- In the Court
- Chinese New Year
Funding Freeze
Trump’s spending freeze spreads chaos across US - Kelsey Tamborrino, Josh Siegel, James Bikales and Zack Colman, Politico:
The order could produce particular pain for the states, local governments and companies counting on many billions of dollars in grants and loans already agreed to by federal agencies, while disrupting programs that benefit households throughout the country. Democrats warn that potential targets include the country’s most expensive transportation initiative — the $16 billion Gateway rail and tunnel project connecting New York and New Jersey — as well as myriad programs to prevent fire, combat drought and research the causes of disease.
Judge Temporarily Halts Trump's Funding Freeze – Julie Manganis, Law360 ($):
U. S. District Judge Loren AliKhan issued a temporary restraining order pausing the White House Office of Management and Budget's Monday evening directive freezing federal grants, loans and aid.
Trump’s Proposed Funding Freeze Means Uncertainty for Tax Credits – Alexander Rifaat, Tax Notes ($):
Judge Loren AliKhan of the U.S. District Court for the District of Columbia on January 28 postponed the planned freeze in funding just minutes before it was set to come into effect, but the White House spent the same day seeking to clarify which programs it was seeking to temporarily halt through a memorandum from the Office of Management and Budget.
White House press secretary Karoline Leavitt insisted that the pause wouldn’t apply to federal resources that go directly to individuals and echoed the OMB’s explanation that it would target only those grant, loan, or financial assistance programs “implicated” in a series of executive orders signed by President Trump.
Funding Halt Upends IRS Low-Income Services at Tax Season Start – Erin Slowey and Erin Schilling, Bloomberg ($):
Three IRS grant programs—volunteer income tax assistance, low-income taxpayer clinics, and tax counseling for the elderly—may be affected by the policy ordered late Monday halting financial assistance across the government starting Tuesday.
The goal is for agencies to review if the spending complies with Trump’s early executive orders to end diversity, equity, and inclusion programs, clean energy initiatives, and other federal spending programs.
IRS Whistleblower Office Could Survive Trump Purge – Kat Lucero, Law360 ($):
Trump has vowed to scale back much of his Democratic predecessor's policies as part of a massive effort to rein in government spending, which will be undertaken by the newly created Department of Government Efficiency, led by Tesla CEO Elon Musk.
Federal Employee Buyouts
Trump Offers Buyouts to Federal Employees Who Don’t Return to Office – Benjamin Valdez, Tax Notes ($):
According to a governmentwide email sent on January 28 by the Office of Personnel Management, employees who don’t wish to return to the office five days a week can participate in a program that will allow them to receive pay through September 30 if they agree to resign. The offer won't be available to employees in the military, U.S. Postal Service, or "those in positions related to immigration enforcement and national security."
Trump Offers Buyouts to Workers Balking at Return to Office – Skylar Woodhouse and Mackenzie Hawkins, Bloomberg ($):
The buyouts will run through Sept. 30 as long as the employees resign by Feb. 6. The Office of Personnel Management posted what it said was a copy of that email on a website page titled “Fork in the Road.”
The buyouts were offered in an email to federal employees that also warned that the administration was seeking a “more streamlined and flexible workforce.”
IRM Transparency
IRS Removes Sections of Internal Revenue Manual from Public View – Lauren Loricchio, Tax Notes ($):
“Huge swaths of the Internal Revenue Manual are missing,” Mandi Matlock of the Center for Taxpayer Rights said. “As practitioners, we rely on it when we’re dealing with IRS employees because this is their handbook on how and what they have to do.”
Tariff Promises
Trump Pledges Tariffs on Semiconductors, Chips, Drugs – Kevin Pinner, Law360 ($). The U.S. will soon place tariffs on foreign-manufactured semiconductors, computer chips and pharmaceuticals in an effort to convince foreign companies to move their manufacturing operations stateside, President Donald Trump told House Republicans at a conference.
Transfer Pricing
IRS Backs New Transfer Pricing Rules Despite Tax Deal Rebuke – Caleb Harshberger, Bloomberg ($):
IRS guidance published last month remains in effect, allowing companies to choose whether to apply the transfer pricing framework, known as Amount B. That notice included a great deal of flexibility to encourage widespread adoption.
In the Courts
Easement Trial to Test Discounted Cash Flow, Inventory Issue – Erin McManus, Tax Notes ($). A conservation easement donor is defending a claimed highest and best use valuation of property based on the would-be discounted cash flow of a limestone mine.
IRS Wants Property to Pay Tobacco Businessman's $24 Million Debt – Tristan Navera, Bloomberg ($). The IRS is looking to seize a North Carolina tobacco businessman’s real estate to resolve a years-running tax debt that’s grown to over $24.1 million.
Miami Tax Biz's False Filings Case on Hold After Settlement – Jack McLoone, Law360 ($). The U.S. Department of Justice and the owner of a Miami-based tax preparation business reached a settlement in a suit accusing her of filing fraudulent returns on behalf of clients, a Florida federal judge said Tuesday, administratively closing the case.
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