May 19, 2024 This Week in Tax Policy for May 17 This Week (May 20 - 24) Congress: Both chambers are in session this week prior to a recess the week of Memorial Day (May 27). House business includes planned consideration of the Federal Disaster Tax Relief Act (H.R. 5863). Hearings scheduled for this week include:
Last Week (May 13 - 17) Tax bill: Finance Committee Chairman Ron Wyden (D-OR) said May 16 that he is still working with Majority Leader Chuck Schumer (D-NY) to get a time schedule to bring to the Senate floor the House-passed Tax Relief for American Families and Workers Act (H.R. 7024) child tax credit and TCJA pre-cliffs bill, after his amendment to add the package to the FAA reauthorization and taxes bill languished (along with all other FAA amendments). Speaking at a Tax Council Policy Institute (TCPI) conference fireside chat with WCEY's Evan Giesemann, Wyden said the treatment of the bill, which hasn't been embraced by Senate Republicans for a variety of stated reasons, has implications for next year's TCJA individual provisions cliff, as it's "hard to build confidence" for a significant bill in 2025 if you can't get a smaller, broadly supported, and paid-for bill done in 2024. Chairman Wyden said the recent Congressional Budget Office (CBO) increase in the cost estimate for extending TCJA provisions was a blow to those who just want to re-up the tax cuts and continue current policies. He also said international tax and Pillar Two of the OECD-led agreement will be an important part of the 2025 debate. Chairman Wyden also said he would need to protect energy tax credits — Republicans have already targeted the repeal of some credits to raise revenue — and mentioned proposals on grantor retained annuity trusts (GRATs) and life insurance products that are viewed as geared exclusively for the wealthy. On one proposal that is folded into H.R. 7024, Punchbowl News reported May 16 that Ways & Means member Greg Steube (R-FL) has 218 signatures for a discharge petition on disaster relief that could be used to bring the measure to the floor. The bill, the Federal Disaster Tax Relief Act (H.R. 5863), would extend rules for the treatment of certain disaster-related personal casualty losses and provide tax relief for losses due to wildfires and the 2023 train derailment in East Palestine, Ohio. It is set to come to a vote in the House next week. Tax exempts: The House Ways & Means Committee May 15 approved a series of bills on tax-exempt issues and disclosure of taxpayer information, some of which had bipartisan support and others that revived debates over the handling of the 2020 elections and the pandemic. The bills that were bipartisan were:
H.R. 8291, Rep. Claudia Tenney's (R-NY) bill to prohibit certain tax-exempt organizations from providing funding for election administration, was approved 23-17. Republicans highlighted a case of what they say was a high-profile individual channeling funds through a nonprofit to local election boards during the 2020 election. Democrats criticized Republicans for sowing doubt about election integrity, and said additional funding allowed safe and efficient Election Day administration, like 24-hour voting for night-shift workers and drop boxes. H.R. 8293, the American Donor Privacy and Foreign Funding Transparency Act by Rep. Dave Schweikert (R-AZ), would provide for the public reporting of data on certain contributions received by tax-exempt organizations from foreign sources and increase penalties for disclosure of US donor information and was approved 23-16. Some of the issues addressed in the bills were raised during a December 2023 Ways & Means Oversight Subcommittee hearing that aired concerns about wealthy individuals, including foreign nationals, donating to tax-exempt organizations that influence US elections. In a related development, Senate Finance Committee members Todd Young (R-IN) and James Lankford (R-OK) introduced the Protecting Charitable Giving Act to increase the penalty for willful disclosure of the identities of donors to tax-exempt organizations from no more than $5,000 to between $10,000 and $250,000. A release said that in order to verify the legitimacy of tax-exempt organizations, the IRS requires them to collect the names and addresses of all major donors, but not to disclose them. Both Senators emphasized the importance of anonymous giving. Tax Court: Chairman Wyden was cited by the Bloomberg Daily Tax Report (DTR) as saying the Finance Committee would hold a hearing in early summer on the three U.S. Tax Court judge nominations put forward by the Biden administration February 1, including Kashi Way, Legislation Counsel at the Joint Committee on Taxation. Three additional Tax Court nominations were announced May 9, including Jeffrey Arbeit, also Legislation Counsel with the staff of the Joint Committee on Taxation. EVs: Reps. Carol Miller (R-WV) and Jared Golden (D-ME), and Senators Joe Manchin (D-WV) and Deb Fischer (R-NE) introduced a Congressional Review Act (CRA) Resolution (H. J. Res. 148, S. J. Res. 87) that disapproves of the Clean Vehicle Credit rulemaking from the Department of Treasury. Senator Sherrod Brown (D-OH) announced he was joining in support of the resolution after expressing concern that the final rules permit the EV tax credit to go toward cars made using a key battery component from certain other nations. Press stories noted that the final May 3 regulations newly permit automakers to source graphite from entities of concern through 2026. "We created this tax credit for American-made cars and it needs to stay that way," Senator Brown said. "The bipartisan backing for the CRA effort is a big deal. It would likely clear both chambers. Manchin and Brown's votes would be enough for success in the Senate as long as Republican senators are on board," Punchbowl News reported May 16. "Remember: CRA resolutions to overturn agency rulemakings get special treatment in the Senate. Supporters can force a floor vote even if leadership isn't on board." Energy tax: Treasury/IRS May 16 released additional guidance on the Inflation Reduction Act's (IRA) domestic content bonus, which applies to facilities and projects built using the required amounts of domestically produced steel, iron, and manufactured products. IRA guidance tracker: This list describes select IRS guidance related to the Inflation Reduction Act (IRA). CAMT
Stock buyback excise tax
Domestic Content Bonus
EVs
Sustainable Aviation Fuel
Transferability
Direct pay
Alternative Fuel Vehicle Refueling Property Credit
IRC Section 45V clean hydrogen credit
IRC Section 45X Advanced Manufacturing Production Credit
Low-income Communities Bonus Credit
Advanced Energy Project Credit
IRC Section 48 ITC
IRC Section 45L Energy Efficient Home Credit
Wage and apprenticeship
Energy Community Bonus Credit
IRC Section 45J Nuclear Credit
CHIPS Act IRC Section 48D Advanced Manufacturing Investment Credit
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