IRS Whistleblower Office isn’t as “loud” as it used to be. A Senate Finance Committee report finds the IRS whistleblower program that rewards people for identifying tax cheats is strapped for cash. Since 2007, the program has generated $6.5 billion in tax collections and paid $1 billion in rewards. But congressional funding has declined and audit revenues have plunged from $1.4 billion in 2018 to $245 million in 2021. The panel recommends that both Congress and Treasury strengthen the IRS Whistleblower Office, especially so it can target offshore tax evasion.
Industrial policy is trending but follow the money. TPC’s Howard Gleckman examines government subsidies for favored industries enacted under the Inflation Reduction Act. He cautions that both direct subsidies and tax benefits pose challenges. A substantial bureaucracy has to manage grants and loans. Tax credits are claimed by companies without administrative review, which can speed the process. But they’re hard for the IRS to audit.
Trading green energy tax credits. The Wall Street Journal reports (paywall) that the Inflation Reduction Act’s expanded renewable energy tax credits are a hot commodity. Firms can sell the credits, even to companies with no direct investment in renewable energy. Buyers will be able to buy a $100 tax reduction for $90 or $95. Said one financier, “They can basically purchase the tax credits… without taking any construction or operational risk.”
For individuals, an online tool to learn about clean energy tax credits. The Biden administration has launched a website to help answer basic questions. Visitors to CleanEnergy.gov can get information about solar panel installation, heat pumps, and home-efficiency repairs.
California’s tax credit for union dues is about to become law. Gov. Gavin Newsom is expected to sign a bill to provide tax credits that reimburse a portion of union dues. The Franchise Tax Board will set what percentage of the dues can be offset within a $400 million allocation. Anyone who pays $100 or less each year in dues would be eligible for a credit equal to their full dues.
Opponents of Washington State’s capital gains tax file briefs with the state Supreme Court. Tax Notes reports (paywall) that plaintiffs argued the state’s high court should uphold a lower court ruling that struck down a 7 percent tax on capital gains in excess of $250,000. The Douglas County Superior Court ruled the levy is a tax on income, which is unconstitutional in Washington State. The state argued it is an excise tax on sales of long-term capital assets.
EU makes windfall tax proposal official. The European Union wants to raise $140 billion in taxes on excess profits of oil and gas companies and cap the profits of renewable and nuclear electricity producers. Each EU member state must adopt these proposals before they become law.
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