Sunday, October 15, 2017
Edward Zelinsky (Cardozo), The House Appropriations Committee and the Johnson Amendment:
The Committee on Appropriations of the US House of Representatives, in a so-called rider to the pending federal budget bill, has proposed significant procedural restrictions on the IRS’s ability to enforce the Johnson Amendment. The Johnson Amendment is the provision of the Internal Revenue Code which prevents all tax-exempt institutions (including churches) from participating in political campaigns. The Committee’s budget rider is the most recent salvo in the ongoing dispute about churches and politics.
October 15, 2017 in Congressional News, Tax | Permalink
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Wednesday, September 20, 2017
Lily Batchelder (NYU), Opportunities and Risks in Individual Tax Reform: Testimony Before the US Senate Committee on Finance:
This testimony before the US Senate Committee on Finance on individual tax reform makes five main points.
First, the current tax reform effort is occurring at a time when low- and middle-income families are facing deep financial challenges. Economic disparities are vast and have been widening for decades. The US also has one of the lowest levels of economic mobility relative to our competitors. Our debt as a share of GDP is projected to grow to unprecedented levels in coming decades, largely because of the retirement of the Baby Boom and increasing life expectancy. This growth in debt will be a drag on economic growth. For all these reasons, tax reform should increase revenues and enhance progressivity. Doing so would boost economic growth and make the tax code fairer at the same time. At a bare minimum, tax reform should maintain the current level of revenues and progressivity—and these both should be measured consistently and without resort to budget gimmicks like a “current policy” baseline.
September 20, 2017 in Congressional News, Scholarship, Tax | Permalink
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Tuesday, September 19, 2017
Congressional Budget Office, An Analysis of Corporate Inversions (Sept. 18, 2017):
U.S. multinational corporations—businesses incorporated and operating in the United States that also maintain operations in other countries—can use a variety of strategies to change how and where their income is taxed. One such strategy is a corporate inversion, which can result in a significant reduction in worldwide tax payments for a company. U.S. companies have engaged in corporate inversions since 1983, and public and government attention to them has varied over the years. Concern grew most recently in 2014 because the group of corporations that announced plans to invert that year included some that were very large: Their combined assets were $319 billion, more than the combined assets of all of the corporations that had inverted over the previous 30 years.
September 19, 2017 in Congressional News, Tax | Permalink
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Monday, August 7, 2017
New York Times op-ed: The Debt-Ceiling Crisis Is Real, by Edward D. Kleinbard (USC):
Sometime in October, the United States is likely to default on its obligation to pay its bills as they come due, having failed to raise the federal debt ceiling. This will cost the Treasury tens of billions of dollars every year for decades to come in higher interest charges and probably trigger a severe recession.
The debt ceiling is politically imposed, and the decision not to raise it, and therefore to choose to default, is also political. It’s something America has avoided in the past. This time, though, will be different. ...
August 7, 2017 in Congressional News, Tax | Permalink
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Following up on previous posts (links below): the Senate has confirmed David Kautter as Assistant Secretary of the Treasury for Tax Policy. From President Trump's nomination announcement:
Mr. Kautter currently serves as Partner-in-Charge of the Washington National Tax practice for RSM, an audit, tax, and consulting services firm. He was also previously the Managing Director of the Kogod Tax Center and Executive-in-Residence at the Kogod School of Business at American University (AU).
Prior to his work at AU, Mr. Kautter spent over 30 years at Ernst and Young, including serving as Director of National Tax for over 13 years. Mr. Kautter also worked on Capitol Hill as Tax Legislative Counsel for former Senator John C. Danforth of Missouri. He is a high honors graduate of the University of Notre Dame and received his J.D. from Georgetown Law Center.
From his webpage at American University's Kogod Tax Center:
August 7, 2017 in Congressional News, IRS News, Tax | Permalink
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Tuesday, August 1, 2017
With the announcement of his resignation/termination, former White House Communications Director Anthony Scaramucci’s tenure in the Trump Administration lasted about 10 days. Those 10 days may prove tremendously interesting from a tax perspective. Like most administrative officials, Mr. Scaramucci requested a Certificate of Divestiture (“Certificate”) from the Office of Government Ethics (“OGE”).
Under the Ethics in Government Act (“Act”) (Ethics in Government Act of 1978, P.L. No. 95-52), certain individuals entering the administration must divest their holdings to avoid ethical dilemmas. Once a Certificate is issued, that individual could qualify under section 1043 for deferral of gains (assuming the procedural requirements are met). Congress enacted section 1043 to further the collective good by eliminating a tax-based barrier for entry into public service. If one qualifies under section 1043, the statute permits deferral of recognition of gain from sales required to comply with the Act if government securities or diversified mutual funds are acquired. (For a full description of the section 1043 rules see also Donald Williamson, A. Blair Staley, and James S. Gale, Tax Planning for Federal Appointee’s Conflict of Interest Requirements, Tax Notes (Mar. 16, 2009).
August 1, 2017 in Congressional News, Political News, Tax | Permalink
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Saturday, July 29, 2017
Washington Post, Democrats’ ‘Better Deal’ for Workers Leaves a Tough Question Unanswered:
Leading Democratic politicians announced their economic agenda for next year's midterm elections on Monday, calling for measures to bring down prices for prescription drugs, control monopolies and help companies pay for training for their workers.
The documents distributed to reporters, however, mentioned taxes only in passing, glossing over what could be a crucial aspect of any Democratic platform in the coming years. Democrats can use tax policy to pay for their other proposals, to equalize incomes directly and to answer frustrated voters' questions about where the party really stands on the economy.
Democrats have frequently called for the rich to pay more in taxes, but some in the party are becoming dissatisfied with the solutions Democrats have put forward so far, which mainly involve untangling kinks and loopholes in the existing system and general, jack-of-all-trades hikes and surcharges.
To lessen inequality and to raise new revenue to fund broad, progressive new programs, senior Democratic policymakers have been talking about novel ideas for taxing the wealth of the richest Americans. Those plans could include a comprehensive tax on capital, a broad category of wealth that includes stocks, bonds, businesses, property and other assets.
“Progressives should be focused on how to fundamentally reform how we tax capital income in this country,” said David Kamin, who served as a special assistant to President Barack Obama on economic issues. ...
July 29, 2017 in Congressional News, Tax | Permalink
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Friday, July 7, 2017
With the looming deadline on both the debt ceiling and the tax reconciliation bill (not to be confused with the ACHA reconciliation instructions), taxes and, hopefully, tax reform are moving to the top of the legislative agenda. The rhetoric of tax reform is heating up. Yesterday Paul Ryan tweeted:
Speaker Ryan is not the only member of GOP leadership discussing tax reform. News last week broke that Steve Bannon wants to raise the top bracket rate to a number that has ”a 4 in front of it”. So, the GOP continues to a least float the idea of substantive tax reform measures.
I don't want to get too carried away about tax reform. Despite my optimism for "reform season," others does not seem to have the same zeal. First there is no "plan" to discuss. Second, the House Appropriations Bill (which I wrote about at Surly) does not seem to be too keen on the chances of real reform measures. For example, the Appropriations Bill addresses estate tax regulations and ACA penalties. If the estate tax and the ACA are on the chopping block, then why worry about the measures in the Appropriations Bill?
July 7, 2017 in Congressional News, Political News, Tax, Tax Analysts, Tax Policy in the Trump Administration, Tax Profs | Permalink
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Monday, May 15, 2017
Andy Grewal (Iowa), The IRS Gets Handcuffed by the Congress, Yale J. on Reg.: Notice & Comment (May 3, 2017):
The House and Senate recently reached agreement on a comprehensive spending bill and expect to pass it soon. Regarding the IRS, the bill freezes the agency’s budget at $11.2 billion and thus does not, as some feared, make substantial cuts to its funding. Nonetheless, the IRS may face hardships, because its funding remains significantly below its 2010 level ($13.6 billion) while its responsibilities have greatly expanded in recent years, especially because of the Affordable Care Act.
May 15, 2017 in Congressional News, IRS News, Tax | Permalink
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Sunday, April 30, 2017
Jane G. Gravelle (Congressional Research Service), The “Better Way” House Tax Plan: An Economic Analysis (R44823) (Apr. 25, 2017):
On June 24, 2016, House Speaker Paul Ryan released the Better Way Tax Reform Task Force Blueprint, which provides a revision of federal income taxes. For the individual income tax, the plan would broaden the base, lower the rates (with a top rate of 33%), and alter some of the elements related to family size and structure by eliminating personal exemptions, allowing a larger standard deduction, and adding a dependent credit. For business income, the current income tax would be replaced by a cash-flow tax rebated on exports and imposed on imports, with a top rate of 20% for corporations and 25% for individuals. The cash-flow tax would be border-adjusted (imports taxed and exports excluded), making domestic consumption the tax base. The system would also move to a territorial tax in which foreign source income (except for easily abused income) would not be taxed. In addition, the proposal would repeal estate and gift taxes. Although the Affordable Care Act (ACA) taxes are not repealed in the Better Way tax reform proposal, ACA taxes are repealed in the Healthcare Task Force proposals.
April 30, 2017 in Congressional News, Gov't Reports, Tax | Permalink
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Thursday, March 16, 2017
Joint Committee on Taxation, Overview Of The Federal Tax System As In Effect For 2017 (JCX-17-17) (March 15, 2017):
This document ... provides a summary of the present-law Federal tax system as in effect for 2017. The current Federal tax system has four main elements: (1) an income tax on individuals and corporations (which consists of both a “regular” income tax and an alternative minimum tax); (2) payroll taxes on wages (and corresponding taxes on self-employment income) to finance certain social insurance programs; (3) estate, gift, and generation-skipping taxes, and (4) excise taxes on selected goods and services. This document provides a broad overview of each of these elements.
March 16, 2017 in Congressional News, Tax | Permalink
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Thursday, March 9, 2017
Congressional Budget Office, International Comparisons of Corporate Income Tax Rates:
In the United States, the top federal statutory corporate income tax rate (the rate set by law that applies to the highest corporate income tax bracket) has been 35 percent since 1993. Most corporate income is taxed at that rate. With state taxes added in, the top statutory rate is even higher; on average, that combined rate was 39.1 percent in 2012, among the highest in the world.
The statutory corporate tax rate is one of many features of the tax system that influence corporate behavior. Companies are likely also to consider other provisions of the tax system—including tax preferences, surtaxes, and noncorporate taxes— that affect the amount of taxes they owe. Among the alternative measures of tax rates that account for some of those provisions are the average and effective marginal corporate tax rates.
March 9, 2017 in Congressional News, Tax | Permalink
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Thursday, March 2, 2017
Joint Economic Committee, The 2017 Joint Economic Report (Feb. 28, 2017) (279 pages):
Chapter 8: The Missing Chapter on Tax Reform…...........….149
The Connection between Tax Reform and Economic Growth...149
A Lost Opportunity for Pro-Growth Reform................................150
The Highest Corporate Tax Rate in the Developed World ........151
International Tax Systems .........................................................153
Passthrough Businesses and the Individual Tax Rate...............155
Double Taxation of Savings and Investment .............................157
Cost Recovery and Investment .................................................161
Should Death Be a Taxable Event?...........................................163
The Cost of Unnecessary Complexity........................................165
March 2, 2017 in Congressional News, Tax | Permalink
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Tuesday, February 28, 2017
Thursday, February 23, 2017
Following up on my previous posts (links below): Forbes, Disclosing President Trump's Tax Returns — An Unconventional Idea, by Bryan Camp (Texas Tech) & Victor Thuronyi (former Lead Counsel, (Taxation), IMF):
Lots of folks want to see Donald Trump’s tax returns. Conventional wisdom is that the returns cannot be disclosed unless he consents. That conventional wisdom is based on the general rule contained in 26 U.S.C. § 6103(a). The general rule forbids IRS employees (and some folks who receive information from IRS employees) from disclosing “return information.” That is a term of art that means not just tax returns but also just about anything in the IRS files.
Section 6103 is a really complex statute, mostly because of the exceptions to the general rule. The exceptions are found in subsections (c) through (o). These exceptions balance a taxpayer’s privacy with the needs of government officers and employees to do their jobs. So the exceptions to the general rule can get quite gnarly.
Several commentators have begun to explore some of the lesser-known exceptions to the general rule of nondisclosure. George Yin has a nice op-ed piece that explains one exception to the general rule in § 6103: Congress can ask for Trump’s returns. Andy Grewal also explores this idea in a well-done post over at the Yale regulation blog. Both posts are worth reading.
Both George and Andy focus on the power of certain congressional committees and staff to ask for tax returns as part of their oversight function. That power is found in § 6103(f)(1) through (f)(4). Democrats have acted on the ideas in George and Andy’s blogs. Stephen Ohlemacher from the AP reports that Democrats on the House Ways and Means Committee tried to get the committee to ask for Trump’s returns, but were outvoted by committee Republicans.
But what if the returns were dumped on the committee’s lap by an IRS employee without the Committee having made a request? That could happen under the very last paragraph in subsection (f).
February 23, 2017 in Congressional News, IRS News, Tax | Permalink
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Wednesday, February 22, 2017
House Ways & Means Committee Ranking Member Richard Neal (D-MA) announced yesterday that Kara Getz has been named Chief Counsel for the committee:
“I have known Kara for many years and I am happy to welcome her back to the House in this Chief Counsel role,” said Ranking Member Neal. “Kara has proven herself to be an indispensable adviser to many Congressional leaders, and moving forward she will be absolutely integral to House Democrats’ efforts as she works on tax, trade, pension, and retirement policy.”
February 22, 2017 in Congressional News, Tax | Permalink
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Monday, February 20, 2017
Weekly Standard, Revenge of the Nerds:
How the Prosperity Caucus and the Joint Economic Committee drove the tax reform debate.
If some sort of fundamental tax reform does occur this year—and the odds of its happening are looking good—the politicians, economists, tax lawyers, congressional staffers, trade associations, think tanks, academics, corporations, and others claiming credit for having influenced the legislation that finally becomes law will be legion.
But the critical impetus for reform has arguably come from a loose clique of policy wonks with ties to an inconsequential congressional committee—a group that came to be called the Prosperity Caucus. Its monthly meetings—which began 30 years ago, shortly after the last big tax reform passed in 1986—have been a regular abode for a long list of thinkers who have greatly influenced Republican thinking about tax reform. Its alumni now hold key positions in Congress and the Trump administration, and one happens to be the current speaker of the House. If any entity can rightly lay claim to credit for the reform, the Prosperity Caucus can.
February 20, 2017 in Congressional News, Tax | Permalink
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Wednesday, February 1, 2017
Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2016-2020 (JCX-3-17):
Tax expenditure analysis can help both policymakers and the public to understand the actual size of government, the uses to which government resources are put, and the tax and economic policy consequences that follow from the implicit or explicit choices made in fashioning legislation. This report on tax expenditures for fiscal years 2016-2020 is prepared by the staff of the Joint Committee on Taxation (“Joint Committee staff”) for the House Committee on Ways and Means and the Senate Committee on Finance. The report also is submitted to the House and Senate Committees on the Budget.
As in the case of earlier reports, the estimates of tax expenditures in this report were prepared in consultation with the staff of the Office of Tax Analysis in the Department of the Treasury (“the Treasury”). The Treasury published its estimates of tax expenditures for fiscal years 2015-2025 in the Administration's budgetary statement of February 9, 2016. The lists of tax expenditures in this Joint Committee staff report and the Administration's budgetary statement overlap considerably; the differences are discussed in Part I of this report under the heading “Comparisons with Treasury.”
February 1, 2017 in Congressional News, Gov't Reports, Tax | Permalink
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Wednesday, January 25, 2017
Tuesday, January 3, 2017
David Weisbach (Chicago), A Guide to the GOP Tax Plan – the Way to a Better Way:
The tax reform plan — A Better Way — put forward by the chairman of the House Ways and Means Committee Kevin Brady and the Speaker of the House, Paul Ryan would be the most substantial tax reform in the United States since the enactment of the income tax in 1913. At the corporate level, the reform would allow immediate expensing of investments, deny deductions for net interest expense, and eliminate the taxation of income from sales in foreign countries while taxing the full value of imports (together shifting the tax base to a destination basis). At the individual level, the system would tax capital income including interest, dividends, and capital gains at half the rate that wages and salaries are taxed. It would also repeal the estate and generation skipping taxes. These changes would go a long way toward shifting the tax system to taxing consumption rather than income.
This paper considers the implementation of the House GOP tax plan and addresses issues that will need to be resolved if the plan is to work as intended. The plan is based on, and builds off of, a long history of thinking about consumption taxes. To understand the basic choices made in the plan, it is helpful to understand this history and how consumption taxes work in general.
January 3, 2017 in Congressional News, Scholarship, Tax | Permalink
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New York Times op-ed: Is Trump’s Tariff Plan Constitutional?, by Rebecca Kysar (Brooklyn):
Among the first steps being floated by the incoming Trump administration is a 5 to 10 percent tariff on imports, implemented through an executive order. It’s the sort of shoot-first, ask-questions-later action that President-elect Donald J. Trump promised during the campaign. It’s also unconstitutional.
That’s because the path to imposing tariffs — along with taxes and other revenue-generating measures — clearly begins with Congress, and in particular the House, through the Origination Clause. When presidents have raised (or lowered) tariffs in the past, they have tended to do so using explicit, if sometimes wide-ranging, authority from Congress.
January 3, 2017 in Congressional News, Tax | Permalink
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Tuesday, December 27, 2016
Forbes: House Says No To Renewed Efforts To Impeach IRS Commissioner, by Kelly Phillips Erb:
A motion to table the measure failed while a motion to simply refer the matter back to the Judiciary Committee passed with a 342-72 vote. The final tally showed 166 Republicans joining 176 Democrats to vote yes, 72 Republicans voting no, and 19 members who did not vote. You can see how your Representative voted here.
If that sounds like progress, it's not: it's a step backward. Earlier this year, the House sidestepped a similar resolution introduced by Rep. Jason Chaffetz (R-UT) to move impeachment proceedings forward; yet another resolution from the fall of 2015 also failed.
Since impeachment is a legal proceeding, while anyone can make a motion to start the process, the Judiciary Committee determines whether there are sufficient grounds for impeachment. With respect to this matter, Judiciary Chair Bob Goodlatte (R-VA) scheduled hearings to investigate the matter: the third was held in September. Following those hearings, the Judiciary Committee did not bring a resolution or recommendation to the floor, and there is no reason to believe that the result will be any different this time.
In fact, this week, Goodlatte indicated that there were differences of opinion in the House regarding the measure to impeach Koskinen. The House would need a majority of votes to impeach the Commissioner and move the measure to the Senate. All 183 Democrats in the House are expected to vote against impeachment, and a number of Republicans will likely follow suit.
December 27, 2016 in Congressional News, IRS News, IRS Scandal, Tax | Permalink
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Monday, December 19, 2016
Senate Finance Committee Majority Staff Report, A Review of IRS Employee Travel: Reductions in IRS Long-Term Travel Spending Needed:
The Committee’s review of IRS travel policies as well as the actual long-term travel habits of some of its employees have led to a number of troubling findings. The number of employees who travel more than half of the year and the cost at which they do so is simply unacceptable. These findings also raise questions about the travel habits of other IRS employees who were outside the scope of this review but who may have had longer travel assignments. More troubling is that the IRS has the tools within its grasp to significantly reduce travel per diem rates and yet it elects not to do so. While the IRS believes that it cannot limit payments to employees for travel expenses to levels below the per diem amount solely to reduce administrative costs, the Committee strongly disagrees with this assertion. The Committee urges the IRS to consider further internal guidance better defining long-term travel (not just for taxable purposes) and instructing approving officials to routinely reduce per diem rates for long-term travel in accordance with Section 301-11.200, Subpart C – Reduced Per Diem of the FTR and Section 184.108.40.206.2.1, Reduced Per Diem of the IRM.
December 19, 2016 in Congressional News, IRS News, Tax | Permalink
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Wednesday, November 30, 2016
The Congressional Budget Office and Joint Committee Taxation have released Factors Affecting Revenue Estimates of Tax Compliance Proposals (CBO Working Paper 2016-05; JTX-90-16):
This paper examines various factors that affect estimates made by the Congressional Budget Office and the staff of the Joint Committee on Taxation of the budgetary savings from tax compliance proposals. Affecting the current law baseline, against which proposed changes are measured, are the size of the tax gap and the amount of Internal Revenue Service (IRS) resources. Other considerations that affect the revenue estimates for either appropriation proposals or changes to the tax code include the distinction between detection and deterrence, the budget scorekeeping guidelines, and the constraints faced by the IRS when trying to obtain a higher return on investment from new initiatives than from the activities allowed under current law. In addition to those common considerations, there are factors unique to proposals to increase funding and to those that would expand the IRS’s enforcement tools allowed under the tax code. Those unique factors are illustrated by two examples—first, the Administration’s proposal to increase funding for IRS enforcement actions that was included in its fiscal year 2016 budget submission and second, legislation enacted in 2016 to reduce identity fraud in the tax system.
November 30, 2016 in Congressional News, Gov't Reports, IRS News | Permalink
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Friday, November 11, 2016
The House Ways & Means Committee seeks to hire an experienced attorney/policy expert who specializes in corporate tax law and the taxation of pass-through entities to help set the legislative agenda of the Ranking Member and the Democratic Members of the Committee:
Responsibilities include: analyzing, developing, and drafting legislative proposals; briefing Members on a variety of tax issues; and preparing for hearings and Committee markups. Exceptional oral and written skills and the ability to express ideas clearly, quickly and concisely are essential to the role. Working knowledge of estate tax, employee compensation, or other niche tax areas is a plus.
November 11, 2016 in Congressional News, Tax | Permalink
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Thursday, November 10, 2016
Letter From 52 Tax Professors to Sen. Mitch McConnell and Harry Reid (Nov. 10, 2016):
We the 52 undersigned tax law professors, academics, and clinicians strongly encourage you to set the U.S. Tax Court nominees, nominee numbers 510 and 511 (Vik Edwin Stoll and Elizabeth Ann Copeland), for an immediate floor vote. Both nominees were unanimously, favorably reported out of the Senate Finance Committee on April 18, 2016 and await a confirmation vote. The Senate received each nomination over a year ago. Vik Edwin Stoll’s nomination was received by the Senate on November 9, 2015, more than one year ago. Elizabeth Ann Copeland’s nomination was received by the Senate on May 4, 2015, over eighteen months ago.
These two nominees have been fully vetted and favorably reported out of the Senate Finance Committee. Moreover, appointment to the U.S. Tax Court has traditionally been a nonpartisan appointment, based on merit. The Senate should therefore look past any partisan concerns and bring these nominees to the floor for a vote.
November 10, 2016 in Congressional News, Legal Education, Tax | Permalink
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Tuesday, October 4, 2016
House Ways & Means Committee Press Release, Joint Committee on Taxation Estimates Even More Foreign Earnings from U.S. Companies Stranded Overseas (Sept. 29, 2016):
On August 25, 2016, Ways and Means Committee Chairman Kevin Brady and Rep. Richard Neal requested from the JCT an updated estimate of the total amount of money accumulated deferred foreign earnings of foreign subsidiaries of U.S. corporations that is held offshore. On August 31, 2016, JCT Chief of Staff Thomas Barthold provided two separate estimates. The first estimate of $2.6 trillion (up from $2.3 trillion in 2012) is based on the most recent tax return data with a projection to 2015 based on ordinary growth of the world economies and corporate earnings and profits. The second estimate of $2.4 trillion (up from $1.8 trillion in 2012) is the amount reported by Audit Analytics based on data from financial statements of the publicly traded corporations in the Russell 1000.
October 4, 2016 in Congressional News, Tax | Permalink
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Saturday, October 1, 2016
Senate Finance Committee tax counsel Jim Lyons died Thursday at the age of 43 after suffering cardiac arrest while playing in a charity basketball game at George Washington University. Here is his professional CV:
- J.D. (1999), Texas
- Tax LL.M. (2000), NYU
- Law Clerk (2000-01), W. Eugene Davis, U.S. Court of Appeals for the Fifth Circuit
- Tax Associate (2001-04), Cleary, Gottleib, Steen & Hamilton, New York
- Republican Tax Staff (2004-05), House Ways & Means Committee
- Civil Trial Attorney (2005-08), U.S. Department of Justice Tax Division
- Republican Tax Staff (2008-16), Senate Finance Committee
October 1, 2016 in Congressional News, Tax | Permalink
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Wednesday, August 24, 2016
Department of Justice Press Release, Congressional Staffer Charged with Failure to File Tax Returns for Five Years:
A congressional staffer was charged yesterday with five counts of willfully failing to file a tax return, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.
According to the criminal information and affidavit, Isaac Lanier Avant of Arlington, Virginia, is a staff member employed by the U.S. House of Representatives since approximately 2002. For tax years 2009 through 2013, Avant earned annual wages of over $170,000, but did not timely file a personal income tax return for any of those years. In May 2005, Avant filed a form with his employer that falsely claimed he was exempt from federal income taxes. Avant did not have any federal tax withheld from his paycheck until the Internal Revenue Service (IRS) mandated that his employer begin withholding in January 2013.
August 24, 2016 in Congressional News, Tax | Permalink
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Wednesday, August 3, 2016
Thursday, July 7, 2016
National Taxpayer Advocate Nina E. Olson today released her statutorily mandated mid-year report to Congress:
The Internal Revenue Code requires the National Taxpayer Advocate to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The National Taxpayer Advocate is required to submit these reports directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report, due by June 30 of each year, must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year.
July 7, 2016 in Congressional News, IRS News | Permalink
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Tuesday, July 5, 2016
Government Accountability Office, Refundable Tax Credits: Comprehensive Compliance Strategy and Expanded Use of Data Could Strengthen IRS's Efforts to Address Noncompliance (GAO- 16-475):
The Earned Income Tax Credit (EITC), the Additional Child Tax Credit (ACTC), and the American Opportunity Tax Credit (AOTC) provide tax benefits to millions of taxpayers—many of whom are low-income—who are working, raising children, or pursuing higher education. These credits are refundable in that, in addition to offsetting tax liability, any excess credit over the tax liability is refunded to the taxpayer. In 2013, the most recent year available, taxpayers claimed $68.1 billion of the EITC, $55.1 billion of the CTC/ACTC, and $17.8 billion of the AOTC.
Eligibility rules for refundable tax credits (RTCs) contribute to compliance burden for taxpayers and administrative costs for the Internal Revenue Service (IRS). These rules are often complex because they must address complicated family relationships and residency arrangements to determine who is a qualifying child. Compliance with the rules is also difficult for IRS to verify due to the lack of available third party data. The relatively high overclaim error rates for these credits (as shown below) are a result, in part, of this complexity. The average dollar amounts overclaimed per year for 2009 to 2011, the most recent years available, are $18.1 billion for the EITC, $6.4 billion for the CTC/ACTC, and $5.0 billion for the AOTC.
July 5, 2016 in Congressional News, Gov't Reports, Tax | Permalink
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Friday, July 1, 2016
Edward D. Kleinbard (USC), The Trojan Horse of Corporate Integration:
The U.S. Senate Finance Committee has invested significant resources, including hearings and staff reports, to make the case for an unusual form of corporate dividend integration – a corporate dividends-paid deduction, combined with a universal shareholder dividend withholding tax collected from the firm. This proposal would not reduce the cash tax outlays of U.S. corporations in respect of distributed or retained earnings. It would not reduce the aggregate tax burdens imposed on most shareholders, and in many plausible circumstances would raise those tax costs. It is a poorly targeted response to design weaknesses in the U.S. international corporate tax system. Its efficiency gains are undeveloped and largely overstated.
July 1, 2016 in Congressional News, Scholarship, Tax | Permalink
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Tuesday, June 14, 2016
The Senate Finance Committee holds a hearing today on Energy Tax Policy in 2016 and Beyond:
- Karen Alderman Harbert (U.S. Chamber of Commerce, Washington, D.C.)
- Susan Kennedy (Advanced Microgrid Solutions, San Francisco)
- Steve Miller (Bulk Handling Systems, Eugene, OR)
- Benjamin Zycher (American Enterprise Institute, Washington, D.C.)
In connection with the hearing, the Joint Committee on Taxation has released Present Law And Analysis Of Energy-Related Tax Expenditures (JCX-46-16):
Since 2004, the Congress has been active in enacting legislation related to energy production (including oil and gas and renewables) and conservation. Part I of this document ... provides tables that summarize current energy-related Federal tax incentives.
June 14, 2016 in Congressional News, Tax | Permalink
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Friday, June 10, 2016
Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2013:
In 2013, according to the Congressional Budget Office’s estimates, average household market income— a comprehensive income measure that consists of labor income, business income, capital income (including capital gains), and retirement income—was approximately $86,000. Government transfers, which include benefits from programs such as Social Security, Medicare, and unemployment insurance, averaged approximately $14,000 per household. The sum of those two amounts, which equals before-tax income, was about $100,000, on average. In this report, CBO analyzed the distribution of four types of federal taxes: individual income taxes, payroll (or social insurance) taxes, corporate income taxes, and excise taxes. Taken together, those taxes amounted to about $20,000 per household, on average, in 2013.1 Thus, average after-tax income—which equals market income plus government transfers minus federal taxes— was about $80,000, and the average federal tax rate (federal taxes divided by before-tax income) was about 20 percent.
June 10, 2016 in Congressional News, Gov't Reports, Tax | Permalink
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Monday, June 6, 2016
Following up on my previous posts:
Senate Finance Committee press release, Hatch Concludes Review into Tax-Exempt Private Museums, Notes Concerning Findings:
Senate Finance Committee Chairman Orrin Hatch (R-Utah) recently concluded a review into private, non-profit museums that enjoy tax-exempt status with a letter sent to Internal Revenue Commissioner (IRS) John Koskinen summarizing the findings of the inquiry. The review, launched in November 2015, sought answers from 11 private foundations designed to assess whether the public interest was being met and whether operations of the foundations merited the substantial tax benefits afforded to their collector-founders through the tax code.
In the letter, Hatch noted that some of the private museums welcome up to half a million guests per year at no charge, but others are not readily available to the public, including many that require advanced reservations and hold short public hours. Hatch went on to detail how many of the responses showed that founding donors continue to play an active role in management of the museum, and some of the museums occupy property owned by donors, including, in some cases, their own private residence.
June 6, 2016 in Congressional News, Tax | Permalink
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Thursday, June 2, 2016
Politico: The Man Who Could Dash the GOP's Tax Dreams: An Economist for a Little-Known Congressional Office Is Getting Pulled Into the Partisan Fight Over Dynamic Scoring. Things Could Get Ugly., by Brian Faler:
The chairmen of the House and Senate tax-writing committees are preparing what they say will be major tax-reform proposals, and both are looking to an obscure congressional agency to make the numbers work.
This normally would be a fairly straightforward task. This year, however, will be different: Republicans now require Congress’ nonpartisan budget analysts to use dynamic scoring — that is, factoring in possible economic benefits of tax cuts considering their effect on the budget.
And that means that very soon, a bunch of people will get mad at Tom Barthold, the Harvard-trained economist heading the little-known Joint Committee on Taxation, which will decide how much the lawmakers’ proposals will cost. He is not looking forward to it. ...
June 2, 2016 in Congressional News, Tax | Permalink
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Thursday, May 26, 2016
The House Small Business Committee holds a hearing today on Sharing Economy: A Taxing Experience for New Entrepreneurs, Part II. From the Hearing Memo:
The IRS needs to get past its historical bias against these new entrepreneurs – based on the outmoded and rigid framework of employee versus contractor – and instead focus on ways to improve awareness and education to increase voluntary, accurate tax code compliance. This is important not only because of the tremendous growth of this sector of the labor market, but because that growth, married with a lack of understanding of how the tax code applies to them, could have very significant tax gap implications going forward. Beyond that, “failure to implement rational tax policy can have serious consequences for job creation and economic growth.” This hearing will examine the tax issues faced by sharing economy participants in greater detail and explore potential solutions to address these unique challenges.
- Nina Olson (National Taxpayer Advocate, IRS) (testimony)
May 26, 2016 in Congressional News, Tax | Permalink
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