It wasn't quite the Fourth of July... More like the sixth of August in the Senate. Senate Majority Leader Chuck Schumer announced yesterday that the Senate would vote tomorrow on beginning debate on the Inflation Reduction Act of 2022. If they vote to begin debate, lawmakers will have up to 20 hours to debate, then hold an open-ended series of votes, before a final up or down vote at the end of the weekend... or Monday. Meanwhile, Sen. Kyrsten Sinema and Democrats have "agreed to remove" reforms to the tax treatment of carried interest and have made unspecified changes to the proposed minimum tax on large corporations. Instead, the bill will include a new 1 percent tax on corporate stock buybacks.
Former IRS commissioners endorse the Manchin-Schumer compromise. The compromise reconciliation bill (the Inflation Reduction Act) would boost funding for the IRS, allowing it to improve tax enforcement with higher-income individuals and filers. Former IRS commissioners Fred Goldberg, Charles Rossotti, and John Koskinen issued a statement yesterday supporting the provision:. “The sustained, multi-year funding contained in the reconciliation package is critical to help the agency rebuild… [and] enforce the tax laws against sophisticated taxpayers who today evade their tax obligations freely because they know that the IRS lacks the tools it needs to pursue them.”
If the EV tax credit changes, will electric vehicle prices fall? The Inflation Reduction Act would restrict eligibility for electric vehicle tax credits worth up to $7,500 to vehicles priced no higher than $55,000 for cars or $80,000 for pickups and SUVs. Bloomberg reports (paywall) that this could pressure electric vehicle manufacturers to lower prices.
Lack of awareness and confusion over eligibility prevented some families from getting their expanded child tax credit (CTC) payments in 2021. Data from the Urban Institute’s December 2021 Well-Being and Basic Needs Survey found that of the eligible households who did not receive CTC payments, nearly one in three did not think they qualified for the benefit. Nearly one in four said they were unaware of the credit or how to claim it. Other reasons adults gave for not getting the payments: someone outside the household claimed the credit for the children who live with them, they opted out of the advance payments, or they tried to claim the credit but did not receive the payments.
FASB: A new power broker? The New York Times reports that if the Inflation Reduction Act passes, it could give the group of seven accountants and professional investors known as the Financial Accounting Standards Board (FASB) a new level of power. The FASB writes and updates “generally accepted accounting principles” that determine how to calculate quarterly and annual profits. Due to the structure of the proposed corporate minimum tax in the bill, FASB could impact tax policy when updating accounting rules.
IRS to expand crypto reporting. TaxNotes reports (paywall) the IRS plans to expand a question about crypto holdings on individual tax returns, asking taxpayers: “At any time during 2022, did you (a) receive (as a reward, award, or compensation); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”
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