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VideoThe Tax Navigator – Insights on Budget Talks, Tax Cases and Energy Credit Developments
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In this episode of The Tax Navigator, Sean Muller focuses on recent federal tax developments, including stalled federal budget negotiations, the potential use of reconciliation and notable tax cases with practical implications for taxpayers. The episode also covers legislative activity affecting solar and wind energy credits and what those changes could mean going forward.
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Detailed Description of The Tax Navigator – Insights on Budget Talks, Tax Cases and Energy Credit Developments
00:00:00
Sean: We still have long TSA lines and no end in sight. The House and Senate can’t even agree. So really, no fat this week, just egg whites.
00:00:08
Sean: We have that President Trump is supposed to submit his budget for the next fiscal year by the end of this week. Obviously, he’s going to be looking for some defense spending.
00:00:17
Sean: Congress is talking about a reconciliation bill because OBBBA was a reconciliation bill last fiscal year, since we go through Sept. 30, and they’re looking at a reconciliation bill now to potentially get funding.
00:00:30
Sean: But you’re only going to do one reconciliation bill a year for spending. And so, what all do you put in it? We may be talking about it, but it would take months to get a good reconciliation bill.
00:00:43
Sean: Then on the tax front, different interesting cases that came out last week. There was a payroll administration company that tried to claim Work Opportunity Tax Credits that are no longer allowed, but they went and tried to claim them in the case of the common-law employer.
00:01:00
Sean: In claiming the credits, they actually don’t hire the employees. They took no risk for the employees, didn’t tell the employees what to do, but they tried to argue they were the common-law employer and they were entitled to the credits, and the case has said no way on that.
00:01:15
Sean: There was an article three weeks ago or so in The Wall Street Journal talking about how homeowners need to justify any sort of improvements to their home in order to offset a sale.
00:01:27
Sean: Well, there was a case last week with an owner of a Florida condo that bought the condo 25 years ago, sold it and didn’t file a tax return for that year. The IRS came in and asserted a gain. Then it’s up to the taxpayer to go prove the IRS is wrong.
00:01:44
Sean: They went through and couldn’t provide many receipts whatsoever and did some testimony that wasn’t very clear. “I did some improvements in 1989, maybe 1990. I’ve been doing this forever.” The taxpayer lost that case pretty handily and had to pay a big assessment for that.
00:02:01
Sean: There is another bill the Democrats tried to do to oversee these solar and wind credits. Part of the OBBBA bill was to make the construction period for solar and wind projects a little harder to get to. And so they tried to go in and reverse the rules and try to make it your standard rules for beginning of construction.
00:02:21
Sean: But the Republicans voted that down, no problem at all. That’s about it for the week. Thanks.
This episode of The Tax Navigator was recorded prior to publication. Some references or updates discussed may reflect information current as of the recording date.
