The Supreme Court hears a key case on limiting the IRS’s ability to shut down tax shelters. The court will hear oral arguments today in CIC Services v. IRS. At stake: Whether the IRS can require promoters of abusive shelters to disclose their activities or face a fine, or whether the promoters can challenge the request for information in court first. If they can, says TPC’s Mark Mazur and Chye-Ching Huang of the Center for Budget and Policy Priorities, promoters could tie the request up in court for years.
Federal funding expires next week—will Congress reach a spending deal? Facing a looming deadline of December 11, members of Congress still aren’t sure whether President Trump will accept a budget agreement. One House Democratic aide told Reuters that negotiators have made progress on how to spend $1.4 trillion over the fiscal year that ends next September 30. It’s not clear if they’ll resolve all the details in time, though.
Can a bipartisan group of Senators bring COVID relief talks back to life? Politico reports that the group has been discussing areas of shared concern, including expanded unemployment insurance and eviction moratoriums that expire at the end of the year. The group generally agrees that Congress needs to extend these programs as well as increase health care funding and restore small business aid. Whether Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer will go along, and what President Trump will do, are another matter.
Key questions for Biden’s first-time down payment tax credit. TPC’s Eugene Steuerle, in the second of two parts on President-elect Biden’s tax credit proposal, describes issues Congress would need to address. Gene explains the federal government “could significantly improve equity among homeowners and provide a higher level of down payment assistance without adding to the long-term cost of the tax expenditures for homeownership.” But that would require “limiting the home mortgage interest deduction, confining the credit to first-time homebuyers, and recapturing the credit upon sale but extending recaptured amounts to future home purchases.”
Michigan’s mayors ask the GOP-led legislature to require non-residents to pay local income taxes. The Michigan Municipal League wants lawmakers to approve bills in this month’s lame duck session to bar non-resident workers from seeking an estimated $160 million in refunds for city income taxes withheld from their paychecks. Taxes in 24 cities are at issue. The League also asked the legislature to allow local governing councils to meet after Dec. 31 to reconcile the state’s tax-limiting constitutional amendment with a 1994 overhaul of its tax and school-finance systems. Mayors warn that COVID-19 is slashing property values and tax revenues.
Today is Giving Tuesday. The IRS reminds taxpayers that non-itemizers can deduct up to $300 for charitable donations made before December 31 when they file their 2020 taxes next spring. The provision was included in the Coronavirus Aid, Relief and Economic Security (CARES) Act.
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