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☆ IRS Plan to Spend $80 Billion Includes Real-Time Tax Alerts, Audits of Wealthy People
▼ + stars: | 2023-04-06 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

WASHINGTON—The Internal Revenue Service unveiled its strategic plan Thursday for revamping the agency amid Republican opposition, promising to shift more taxpayer interactions onto digital platforms and add thousands of new enforcement staffers to audit wealthy people and corporations. The plan starts spelling out how the tax agency will use $80 billion Congress provided last year. It outlines a renewed IRS focus on enabling smoother taxpayer engagement with the agency, eventually including real-time alerts of problems with returns and clearer information about the status of refunds or audits.

☆ New EV Rules Mean Fewer Models Eligible for Tax Credit
▼ + stars: | 2023-03-31 | by ( Yuka Hayashi | Richard Rubin | ) www.wsj.com time to read: 1 min

WASHINGTON—The Biden administration detailed new criteria for an electric-vehicle tax-credit program, a change that officials said they expect will reduce the number of eligible models. The new rules, issued by the Treasury Department Friday, aim to make the U.S. less reliant on batteries and critical minerals shipped from China. For car buyers to claim the full $7,500 tax credit, the batteries must contain set amounts of components made in North America and critical minerals sourced in the U.S. or from certain friendly countries.

☆ Credit Suisse Violated Plea Deal in Tax Case, Senate Report Says
▼ + stars: | 2023-03-29 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

WASHINGTON— Credit Suisse Group AG violated the terms of a 2014 criminal plea agreement in which it promised to stop helping Americans hide assets from the U.S. tax authorities, according to a Senate report released Wednesday. The Senate Finance Committee’s Democratic staff said Credit Suisse failed to report bank transfers tied to what it says may be an ongoing criminal tax conspiracy involving more than $100 million held by a family with dual citizenship in the U.S. and Latin America.

☆ Small Businesses Face Big Tax Bills From Research-Deduction Change
▼ + stars: | 2023-03-17 | by ( Richard Rubin | Photographs Christopher Capozziello For The Wall Street Journal | ) www.wsj.com time to read: 1 min

Laura Lynn Gonzalez expected a tax refund this year, after her two-employee data-visualization company experienced a $30,000 loss. Instead, she said, she is facing a $100,000 federal tax bill that is about as large as her 2022 salary. Ms. Gonzalez’s predicament stems from a piece of the 2017 tax law that is taking effect now. It requires companies to spread deductions for research costs over five years instead of taking them immediately.

☆ Biden Seeks Extension of Trump Tax Cuts for Most Households
▼ + stars: | 2023-03-09 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

WASHINGTON—President Biden largely wants to extend Trump-era tax cuts for households making under $400,000 a year beyond their scheduled expiration after 2025, the White House said in a budget statement Thursday. Mr. Biden’s budget calls for extending those tax cuts “in a fiscally responsible manner” by using new tax increases on wealthy people and large corporations to offset the budget-deficit increases that extended tax cuts would create. The cuts expanded the standard deduction and lowered tax rates for all income groups and will lapse after 2025 unless Congress acts.

The budget is unlikely to gain momentum on Capitol Hill, with the GOP expected to oppose most of the administration’s ideas. WASHINGTON—President Biden will outline a plan to reduce federal budget deficits by nearly $3 trillion over the next decade and raise taxes on wealthy people and large corporations, kicking off monthslong spending negotiations with Republicans in Congress. Mr. Biden’s fiscal year 2024 budget plan, which will be released Thursday, will lay out his recommended funding levels for federal agencies and departments. He is expected to ask for more in defense spending than he requested last year and propose drug-policy changes and efforts to cut fraud and waste that the White House said would save hundreds of billions of dollars.

☆ Big Companies Seeing Tax Benefits From Law Change Some of Them Fought
▼ + stars: | 2023-03-08 | by ( Richard Rubin | Jennifer Williams-Alvarez | ) www.wsj.com time to read: +6 min

Those companies now qualify for a bigger tax break for exports because of the way the research-deduction change alters their tax calculations. Photo: Dado Ruvic/REUTERSModerna saw that tax break jump to a 7.4 percentage-point benefit on its tax rate from 4.8 points in 2021, even as its cash tax payments rose. The change requiring companies to spread out research deductions was part of the 2017 tax law, and it was designed to partly offset the revenue loss from cutting corporate tax rates. PREVIEWAt the same time, the smaller research deduction means many companies can get a bigger advantage from the export tax break. The size of the FDII tax break is based in part on how much income a company has.

President Biden’s budget proposal will kick off monthslong spending negotiations with lawmakers. WASHINGTON—President Biden’s budget blueprint will lay out plans to save hundreds of billions of dollars by seeking to lower drug prices, raising some business taxes, cracking down on fraud and cutting spending he sees as wasteful, according to White House officials. Mr. Biden is set to release his fiscal 2024 budget plan on Thursday. Administration officials said it would propose cutting federal budget deficits by nearly $3 trillion over the next decade. But the release of the budget will kick off monthslong spending negotiations with lawmakers.

President Biden’s budget plan will also outline several new prescription-drug-related proposals. WASHINGTON—President Biden’s coming budget blueprint will propose extending the solvency of a key Medicare trust fund by at least 25 years, according to the White House, in part by increasing tax rates on people earning more than $400,000 a year. The plan would raise Medicare taxes to 5% from 3.8% for those top earners and effectively expand the reach of the tax so it applies to business income as well as investments, wages and self-employment income. Mr. Biden would also redirect some existing taxes from the government’s general fund to a Medicare fund. The Medicare program provides health insurance for adults 65 and older, as well as some younger people with disabilities.

☆ Biden’s Budget to Lay Out Plan to Extend Key Medicare Trust Fund by 25 Years
▼ + stars: | 2023-03-07 | by ( Andrew Restuccia | Richard Rubin | ) www.wsj.com time to read: 1 min

☆ Biden Budget to Draw Battle Lines With GOP on Taxes, Spending Ahead of 2024 Campaign
▼ + stars: | 2023-03-05 | by ( Andrew Restuccia | Richard Rubin | ) www.wsj.com time to read: 1 min

President Biden is expected to call for raising taxes on corporations. WASHINGTON—President Biden this week will release his annual budget blueprint, a document that is unlikely to gain momentum in Congress but will shed light on his priorities ahead of an expected re-election campaign and set the stage for contentious negotiations with Republicans over government spending. Mr. Biden, in his February State of the Union address, said his fiscal year 2024 budget will map out a plan to lower the deficit by $2 trillion over 10 years and extend the solvency of the Medicare Trust Fund by at least two decades. He pledged to achieve those goals without cutting Social Security or Medicare benefits or raising taxes on Americans making less than $400,000 a year.

☆ Converting empty office buildings into apartments sounds like a no-brainer, but big landlords are resisting for one big reason
▼ + stars: | 2023-02-23 | by ( Alex Nicoll | ) www.businessinsider.com time to read: +7 min

Three experts tell Insider office prices need to fall before conversions are commonplace. But for these plans to be successful, the world of real estate must address the elephant in the room: Office buildings are simply too expensive. Moody's laid out some basic math: In 2021, the average New York apartment building traded at $434 a square foot. Now in the US, he's up to the same business but not yet with the vacant office buildings that dot the downtowns of large metropolises. Among them is an older, 130,000-square-foot St. Louis office building, which represents some of the city's most outdated stock, Rubin told Insider.

☆ Biden’s Pick for IRS Chief to Face Questions About Agency’s $80 Billion Expansion
▼ + stars: | 2023-02-15 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

Danny Werfel was acting IRS commissioner for most of 2013 and before that was a senior official at the Office of Management and Budget. WASHINGTON— Danny Werfel , President Biden’s choice to run the Internal Revenue Service , will tell senators Wednesday that he is committed to focusing tax enforcement on high-income Americans, as lawmakers press him for details on how the agency plans to use the $80 billion Congress gave it last year. Mr. Werfel’s confirmation hearing is expected to focus less on his qualifications for the role—which include a stint as the acting IRS leader in 2013 and years as a consultant—and more on the new IRS funds from the Inflation Reduction Act.

☆ New $10 Billion Program for Energy Subsidies Set for Rollout by Treasury Department
▼ + stars: | 2023-02-15 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

WASHINGTON—The Treasury Department is preparing to start a $10 billion program for subsidizing advanced energy projects and a new tax break for solar-and-wind projects in low-income communities. The two programs were created last year in the climate, health and tax law known as the Inflation Reduction Act. The department has been working to lay out the details of how the law’s tax breaks will work, as companies begin taking advantage of new incentives to invest in projects aimed at accelerating the country’s shift away from fossil fuels.

☆ Biden’s Pick for IRS Chief Faces Questions About Agency’s $80 Billion Expansion
▼ + stars: | 2023-02-15 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

Danny Werfel, acting IRS commissioner for most of 2013, delivers an opening statement at his confirmation hearing Wednesday in Washington. WASHINGTON— Danny Werfel , President Biden’s choice to run the Internal Revenue Service , told senators Wednesday that he is committed to focusing tax enforcement on high-income Americans, as lawmakers press him for details on how the agency plans to use the $80 billion Congress gave it last year. Mr. Werfel’s confirmation hearing is focusing less on his qualifications for the role—which include a stint as the acting IRS leader in 2013 and years as a consultant—and more on the new IRS funds from the Inflation Reduction Act.

☆ Treasury Department Set to Roll Out New Tax Credits for Energy Projects
▼ + stars: | 2023-02-13 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

☆ These Millionaires Tried Turning a Yacht Into a Tax Break. The IRS Sank Their Plan.
▼ + stars: | 2023-02-11 | by ( Richard Rubin | Rachel Louise Ensign | ) www.wsj.com time to read: 1 min

JR and Loren Ridinger wanted a new yacht. First, they needed to get rid of the old one. The 116-foot Utopia II wasn’t selling, so the Ridingers and their lawyers hatched an alternative plan: Donate it, and reap a big tax deduction.

☆ House Tax Leader Denounces International Plan to Raise Minimum Corporate Tax
▼ + stars: | 2023-02-10 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

Rep. Jason Smith said ‘Republicans will not tolerate’ changes that could let other countries collect more taxes from U.S. companies. WASHINGTON—The House’s top tax legislator criticized an international agreement to raise minimum taxes on corporations, saying Republicans in Congress wouldn’t accept the deal reached by the Biden administration and more than 130 countries. Rep. Jason Smith (R., Mo. ), who became chairman of the House Ways and Means Committee last month, said the agreement would help China gain a competitive advantage and hurt the U.S.

☆ Top GOP Tax Legislator Says He’ll Boost Workers, Probe Companies
▼ + stars: | 2023-02-06 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

Rep. Jason Smith, who represents southeastern Missouri, said his policies will focus on ‘real Americans’ over large corporations. Jason Smith (R., Mo. ), the House’s new top tax writer, is promoting an approach he says would favor working-class Americans over large corporations, a shift in tone from his predecessors that raises questions about companies’ ability to push tax cuts through Congress. In speeches, interviews and a 10-year voting record in Congress, Mr. Smith has been a steady supporter of Republican tax cuts, and he says that basic approach isn’t changing. As chairman of the Ways and Means Committee, he says the needs of farmers, small businesses and working-class Americans should come first when setting policy.

☆ Biden to Urge Quadrupling New 1% Tax on Stock Buybacks
▼ + stars: | 2023-02-06 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

President Biden during his State of the Union address is also expected to tout economic progress that has occurred since early in the pandemic. WASHINGTON—President Biden plans to propose quadrupling the 1% tax on stock buybacks that took effect in January, which the White House said would encourage companies to invest in their growth instead of boosting shareholders. Mr. Biden will discuss the proposed change during his State of the Union speech on Tuesday, the White House said in a preview of the address, in which the president will also tout economic progress since the early days of the Covid-19 pandemic. The plan to boost the buyback tax might struggle to advance through the divided Congress, where Republicans control the House.

☆ Perfect Storm for Some Companies: Fewer Interest Deductions, Rising Rates
▼ + stars: | 2023-02-06 | by ( Mark Maurer | ) www.wsj.com time to read: +9 min

For some firms, the move shrank the amount of taxable income that can be offset by interest expenses. Higher interest rates generally lead to higher interest expenses tied to companies’ variable-rate debt, new borrowings and refinancings. The cap can hit companies’ cash flows immediately, though not necessarily their financial statements, due to timing differences in claiming the deductions. Aluminum maker and recycler Novelis plans to allocate less cash toward its venture-capital arm due to the higher interest expenses. Leveraged loans have variable rates that typically reset every one to three months, based on short-term interest rates.

☆ Global Minimum Tax Deal Advances With Partial Reprieve for U.S.-Based Companies
▼ + stars: | 2023-02-02 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

The Organization for Economic Cooperation and Development explained how the U.S. tax system will interact with the minimum taxes being implemented in other countries. WASHINGTON—The U.S. prodded other major countries to agree to a coordinated global corporate tax increase. Now, international officials are moving ahead with their tax increases while giving U.S. companies a temporary break from some tax hikes in hopes of prompting the U.S. to implement the deal. The Organization for Economic Cooperation and Development on Thursday spelled out how the U.S. tax system will interact with the minimum taxes being implemented in the European Union, the U.K., South Korea and other countries. The rules offer a partial reprieve for U.S. companies through 2025.

☆ You’re My No. 1. Except on Our Joint Tax Return.
▼ + stars: | 2023-01-25 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

WASHINGTON—When calculating federal income taxes, it makes absolutely no difference which spouse is listed first on a joint tax return. An opposite-sex couple can put the man’s name first, start with the woman’s name, list them in order of income, go alphabetically or begin with the spouse who woke up earlier last Tuesday. But there are two lines for names on Form 1040. Somebody has to go first, and somebody has to go second. Maybe knowing something about the order we choose can help us make a deduction about ourselves.

☆ IRS Says Tax-Filing Season to Start Jan. 23
▼ + stars: | 2023-01-12 | by ( Richard Rubin | ) www.wsj.com time to read: 1 min

WASHINGTON—The Internal Revenue Service will begin accepting 2022 individual income tax returns on Jan. 23, kicking off a tax-filing season in which officials promise better customer service than last year. The tax-payment deadline this year is April 18 for most taxpayers. Many California residents can wait until May 15 because of the recent natural disasters there. Taxpayers can claim an automatic six-month extension to file their full returns; that doesn’t change the payment deadline.

☆ Rep. Jason Smith Picked to Lead House Ways and Means Committee
▼ + stars: | 2023-01-10 | by ( Richard Rubin | Siobhan Hughes | ) www.wsj.com time to read: 1 min

Rep. Jason Smith of Missouri had been the top Republican on the House Budget Committee. WASHINGTON—House Republican leaders chose Rep. Jason Smith (R., Mo.) to run the House Ways and Means Committee, giving him a prime perch to shape the party’s approach to tax, trade and health policy. As chairman, Mr. Smith will lead a committee with broad power over economic policy and healthcare that is poised to receive an influx of new Republican members. He will help guide the party’s oversight work as the Internal Revenue Service starts spending the $80 billion it received last year.

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