Lately on the Hill
Here’s a look at the latest tax-related happenings on the Hill, including a rewritten bill affecting crypto assets and a slew of new bills and proposals.
- Rewritten crypto bill released. The Lummis-Gillibrand Responsible Financial Innovation Act, introduced by Sens. Cynthia M. Lummis (R-WY) and Kirsten E. Gillibrand (D-NY), would provide for the tax treatment of crypto assets. The bill would appropriate $1.4 billion over five years, paid for by making crypto assets subject to the wash sale rule and by requiring intermediaries to mark their assets to market for tax purposes.
- The bill is a major rewrite of last year’s legislation. So far, bringing crypto assets within the regulatory boundary has proven to be difficult.
- The bill aims to provide for consumer protection and encourage responsible financial innovation, Lummis and Gillibrand said in a July 12 summary.
- A comprehensive section-by-section overview of the bill is available online.
- Also related to digital assets:
- Senate Finance Committee Chairman Ron Wyden (D-OR) and Finance Committee Ranking Member Mike Crapo (R-ID) have launched an effort to address uncertainties surrounding the tax treatment of digital assets. An open letter seeking input from experts, stakeholders, and interested parties has been posted.
- New bills and proposals introduced. Here is a roundup of some of the latest tax-related bills and proposals introduced in Congress:
- The Stop Predatory Investing Act, introduced by Senate Finance Committee member Sherrod Brown (D-OH), would bar taxpayers who own 50 or more single-family rental homes, which have been acquired after the date of enactment, from claiming interest and depreciation deductions on the newly acquired properties. The bill is intended to “prevent corporate landlords from driving up local housing prices.”
- The Medicare and Social Security Fair Share Act, introduced by Senate Finance Committee member Sheldon Whitehouse (D-RI), would increase payroll taxes on those earning at least $400,000 to ensure Social Security and Medicare solvency.
- The Election Worker Tax Benefits Act, introduced by Rep. Nick LaLota (R-NY), would exclude from gross income up to $600 in qualified election worker compensation.
- The Casualty Loss Deduction Restoration Act, introduced by Sen. Richard Blumenthal (D-CT), would repeal the temporary limitation on personal casualty losses.
- The Don't Weaponize the IRS Act, introduced by House Ways and Means Committee member Mike Kelly (R-PA) and House Budget Committee Chair Jodey C. Arrington (R-TX), would codify a rule “that protects groups regardless of their political ideology or beliefs and prevents the IRS from doxing donors.”
IN CASE YOU MISSED IT
- The IRS and its Security Summit partners have announced a special summer campaign series designed to help tax professionals be on alert for tax-related identity theft schemes.
- A Treasury report studying preliminary data on opportunity zones suggests the program is failing to attract investment in the poorest communities.
- Flooding victims anywhere in Vermont now have until November 15, 2023 to file various individual and business tax returns and make tax payments. The current list of eligible localities is always available on the disaster relief page on IRS.gov.
- The IRS has updated Publication 1586 (Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs on Information Returns). The publication was last updated in July 2022.
- The U.S. House Committee on Ways and Means announced that the Subcommittee on Tax will hold a hearing on Wednesday, July 19, 2023. The hearing will discuss the Biden administration’s global tax negotiations and the potential impact on American jobs, economic growth, and tax revenues.
- The IRS is soliciting comments concerning the collection of information related to the tax-exempt organization complaint (referral) form.
- The IRS has announced its intention to issue Notice 2023-54, final regulations related to required minimum distributions under Section 401(a)(9) of the Internal Revenue Code that will apply no earlier than the 2024 distribution calendar year. The final regulations won’t take effect until 2024, though the notice includes transition relief for 2023. Notice 2023-54 will be in IRB: 2023-31, dated July 31, 2023.
Related to the Inflation Reduction Act (IRA) & CHIPS Act
- Treasury Deputy Secretary Wally Adeyemo met with various European public- and private-sector stakeholders involved in clean energy. Negotiations continue on a deal that would allow more European firms to qualify for the clean vehicle tax credit at least partially under the IRA.
- The IRS’ proposed fiscal 2024 budget was released on July 13. The budget includes a recommendation that the IRS be given $150 million for its cybersecurity enhancement endeavors. The House Appropriations Committee, however, still proposes reducing the IRS’ overall annual budget by 9% to $11.24 billion.
- The IRS has opened or reopened 35 Taxpayer Assistance Centers since the passage of the IRA and hired more than 600 personnel to provide in-person assistance. The centers have been designed to give taxpayers from underserved areas an opportunity to meet face-to-face with IRS customer service.
International Tax
- The Senate Foreign Relations Committee passed the Taiwan Tax Agreement Act of 2023 on July 13. The act would authorize the Biden administration to negotiate a tax agreement between the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office, providing double taxation relief and measures to encourage compliance.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.