Taxes
There is a bit of political theater that plays out in Washington every few years—lawmakers from high-tax states storm the stage to defend the state and local tax (SALT) deduction, as though it were etched in the Constitution. The arguments run the gamut: from its ability to protect middle-class families, to its support for essential services, and the prevention of the dreaded “double taxation.” What they won’t say, however, is that it overwhelmingly benefits wealthy households, distorts federal tax equity, and props up state tax regimes that should have to answer to their own voters. So here is the relevant…
Representative Darin LaHood just introduced the “Residence-Based Taxation for Americans Abroad Act” on December 18, marking a potentially transformative moment for Americans living overseas. This bill aims to overhaul the United States’ unique system of citizenship-based taxation—a regime that taxes citizens on their worldwide income regardless of where they live—and replace it with a residency-based system. If enacted, this change could significantly alleviate the compliance burdens that expatriates have endured for decades. The Current U.S. Tax System: A Global Outlier For those unfamiliar with the intricacies of the U.S. tax regime, the current framework is an anomaly in the global…
A judge in the U.S. District Court for the Eastern District of Texas has ruled that a nationwide preliminary injunction barring FinCEN from enforcing the Corporate Transparency Act (CTA) will stand while the government’s appeal winds its way through the court system. The government’s request followed Judge Amos Mazzant’s December 3 ruling that the CTA was unconstitutional. Initial Ruling In Texas Top Cop Shop, Inc., et al. v. Garland, et al., Judge Mazzant, an Obama appointee, granted the request of the National Federation of Independent Business (NFIB) for a preliminary injunction, blocking the U.S. Department of Treasury from enforcing the…
In this episode of Tax Notes Talk, Tony Santiago, founder and president of TaxSearch Inc., discusses the future of tax leadership and his recommendations for tax departments looking to create an effective succession plan. Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for clarity. David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: securing the future. We’ve previously talked about the tax field being in a period of transition and what skills younger practitioners need to succeed, which you’ll find linked to…
As the clock continues to tick down, Congressional leaders have finally released the text of a proposed funding measure to keep the lights on. As expected, it’s a short-term bill intended to fund the government through March 14, 2025. Without any action by Friday, December 20, 2024, funding will run out for several government agencies. Don’t be fooled by the “short” in the phrase “short-term”: the bill runs 1,547 pages long. (By contrast, the September 25, 2024, continuing resolution, which extended funding through December 20, 2024, was just 21 pages.) Key Provisions The bill is chockfull of programs and tweaks.…
The election results certainly bring a new day when it comes to taxes – especially for small and medium businesses. In particular, the election will end the log-jam that has held up providing relief from the amortization requirements for research expenses that took effect in 2022 – and bring back the long-time traditional policy of allowing immediate expensing of research costs. The amortization of research expenses was included in the Tax Cuts and Jobs Act (TCJA) in 2017 as a payfor. It was the odd provision that no member of Congress supported and was never intended to go into effect.…
Donald Trump’s second-term success depends on his getting a substantive tax cut bill passed—and quickly. A sluggish and inflation-scarred economy was the biggest factor in sinking the Democrats in November. That fact should spur Republicans to push through a huge tax reduction in 2025 as fast as possible. President Trump’s 2017 tax bill expires at the end of next year. Not renewing it—and, indeed, enhancing it with more tax cuts—would seriously damage the economy going into the 2026 congressional elections, giving democrats a decisive advantage. Democrats in control of both the House and the Senate would be hell for the…
With about a week to go before Christmas—and a shutdown looming—Congress was back to work this week. Despite negotiations, the House and the Senate have still not reached an agreement on spending. Without a vote by Friday, December 20, funding will run out for several government agencies. That’s a tall order, considering that the House has not yet released the text of a spending bill. At this point, the goal isn’t an actual budget for the year, but rather an agreement to keep kicking the can down the road. Reportedly, the plan is to get a spending package together that…
President-elect Donald Trump’s personnel choices, public comments by him and his choices for key administration positions, and a second-term agenda laid out by conservative think tanks with deep ties to Trump all point to hard times for the IRS. But the consequences may go beyond the agency itself. A bigger worry is that labeling the IRS as part of the “deep state” and limiting its ability to administer the revenue code by sharply curtailing its budget could threaten voluntary tax compliance. What Trump And Allies Say Eight years ago, as a presidential candidate, Donald Trump said that not paying income…
In a move the White House called “the largest single-day grant of clemency in modern history,” President Joe Biden has commuted the sentences of 1,499 people, including one woman convicted of embezzling more than $53 million in taxpayer money. The news that Rita Crundwell would finally be set free has been met with dismay in some circles, including in the town whose accounts she raided. Rita Crundwell Before she went to prison, Rita Crundwell, now 71-years old, had lived in or near Dixon, Illinois, for most of her life. Dixon, which is also the boyhood home of Ronald Reagan, is…
President Elect Donald Trump has had a series of victories recently, and one more as come his way in the settlement of his defamation suit against ABC News and George Stephanopoulos. ABC will pay $15M plus an extra $1M to Trump’s lawyer in the case, Alejandro Brito. A copy of the settlement agreement can be read here. Trump sued ABC News and Stephanopoulos after the latter claimed that Trump was “found liable for rape” by a Manhattan jury in the E. Jean Carroll case. In reality, while Ms. Carroll had accused Trump of rape, the jury did not make that…