Biden Open To IRS Cuts To Secure Debt Deal
The Biden administration is reportedly open to scaling back the IRS’s budget increase. The news comes from The Washington Post, as Congress nears the potential June 1 default date with no deal yet on the debt sealing. According to the Post, the proposal could allow for up to $10 billion to be taken out of the $80 billion the agency was authorized under the Inflation Reduction Act.
A taxpayer in Minnesota wins Supreme Court Case over her home’s equity. The US Supreme Court held this week that Hennepin County could not use the tax debt owed by a property owner to confiscate the property’s equity upon its sale. Hennepin County had sold Geraldine Tyler’s home for more than the debt she owed on it and refused to refund the surplus proceeds from the sale. In the decision, Chief Justice Roberts wrote that “a taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more.”
Oklahoma lawmakers’ budget proposal lacks some tax cuts. State lawmakers released a $12.9 billion budget without the tax cuts called for by Gov. Kevin Stitt. The governor wanted a 0.25 percent cut to the personal income tax rate and eliminate the 4.5 percent tax on grocery sales, which would have cost $370 million annually. The proposed budget does include some tax cuts. It would eliminate Oklahoma’s franchise tax and undo the marriage penalty for couples who file jointly, reducing annual tax revenues by $70 million.
Gearing up for the next tax policy debate in the House… Bloomberg Tax reports (paywall) that the House Ways & Means Committee plans to release an economic package in early June, presuming the debt limit crisis has been resolved. That package would undo recent changes to the tax treatment of research and development deductions and restore bonus depreciation for most capital investments. remove the more restrictive cap on interest expense deductions. The changes were scheduled as part of the 2017 Tax Cuts and Jobs Act to ensure the law’s deficit impact at the time of enactment met budget reconciliation rules used to bypass the Senate filibuster. The R&D deduction change could garner bipartisan support, but congressional Democrats and the president have argued that the 2021 expanded child tax credit should also be restored in some form before agreeing to preferential business tax changes.
Belgium will stop sharing financial data of “accidental Americans.” The Belgian Data Protection Authority asserted this week that transferring information required under the US Foreign Account Tax Compliance Act (FATCA) is “unlawful.” FATCA requires that foreign-based financial institutions must transmit the financial account data of all their customers identified as US citizens to their country’s authorities. This includes customers who are “accidental Americans” – born in the United States but with no other ties to the US.
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