Tag:tax
TAX TALK SERIES: IRS Clarifies Post-TCJA Confusion on Home Equity Interest
On December 20, 2017, Congress passed the Tax Cuts and Jobs Act (“TCJA”) designed to decrease the taxable rate for corporations and individuals, and significantly limited allowable deductions. Since this change to the Tax Code was one of the largest since the Reagan era, the Internal Revenue Service will need to publish many regulations and advisories in the coming months to better clarify provisions of the TCJA. This multi-part series will explore prominent IRS regulations and advisories as they relate to the TCJA, and what these regulations and advisories mean for both individual and corporate taxpayers.
U.S. Passports to be Revoked for Unpaid Taxes
Beginning January, 2018, U.S. citizens with unpaid taxes may find their U.S. passport applications denied and their existing passports revoked. The I.R.S. announced that it will begin implementation of procedures to notify the State Department of taxpayers the I.R.S. certifies as owing a “seriously delinquent tax debt.” This may come as a rude awakening to many Americans, although both the press and television news issued warnings going back more than a year ago.
The Effect on Compliance of Lowering Corporate Tax Rates is Uncertain
It is commonly accepted that lowering tax rates increases tax compliance and high tax rates encourage tax evasion. The recent U.S. tax reform bill, the Tax Cuts and Jobs Act of 2017, was enacted partly due to assumptions that lowered tax rates would increase tax compliance and recover lost revenue. Here, I examine the theoretical basis for the claim that lowering income taxes increases compliance, as well as the external evidence regarding the extent of increased compliance due to lowering tax rates.
TAX TALK SERIES Understanding Notice 1036: IRS Adjusted Withholding Tables to Accommodate New Tax Plan
On December 20, 2017, Congress passed the Tax Cuts and Jobs Act (“TCJA”) designed to decrease the taxable rate for corporations and individuals, and to limit allowable deductions. Since this change to the Tax Code was one of the largest since the Reagan era, the Internal Revenue Service will need to publish many regulations in the coming months to better clarify provisions of the TCJA. This multi-part series will explore prominent IRS regulations as they relate to the TCJA, and what these regulations mean for both individual and corporate taxpayers.
What is “Vote ‘Yes’ for Fairness” and why is it all over my T.V.?
If you live in Illinois, you have likely seen in the past couple of days this vibrant blue commercial at least once or twice. The commercial encourages Illinois voters to “Vote Yes for Fairness” at the polls this November by voting their approval of an amendment to the 1970 Illinois Constitution. The proposed amendment would change the state’s current state income system from a flat tax to a graduated income tax. Illinois Governor J.B. Pritzker made the adoption of a progressive income tax a centerpiece of his policy agenda in a budget address back in February 2019, and it was geared up to be a focus of election-season debates before the COVID-19 pandemic took precedence. With the Illinois general election less than fifty days away, however, the ‘Vote Yes for Fairness’ campaign has bolstered its attempts at garnering voters’ approval of the proposed amendment.
Opportunity Zone Program: Opportunity for Investors or Opportunity for Communities?
With the implementation of the Tax Cuts and Jobs Act that was passed in 2017, there have been several changes to the tax system. The Opportunity Zone program was a small piece of the tax reform that has recently gained more publicity. The Opportunity Zone program provides tax benefits to real-estate investors. The Trump Administration recently released definitions and rules in a package of proposed regulations.
The Unintended Effects of the BEAT Provision on the Insurance Sector
A provision within the new tax overhaul is emerging as a leading concern for the property and casualty insurance sector. The industry recently experienced growing uncertainties about how a vaguely worded provision within the Base Erosion and Anti-Abuse Tax (BEAT) may affect their bottom line. However, the insurance industry is not the only group that may experience these unintentional ramifications; consumers and small businesses are also likely to see an increase in their premiums due to implications of BEAT.
Tax Compliance During the Partial Government Shutdown
On December 22, 2018, for the third time in a year, the United States government shut down. Almost two years into his presidency, President Trump, feeling pressure to accomplish one of his many promises from the campaign trail, requested $5.7 billionfrom Congress to fund his proposed wall at the border of the United States and Mexico. Following negotiation efforts by Senate Democrats, the standoff between the President and the Senate ended in a financial default, triggering a partial shutdown. The shutdown became the longest in U.S. history on January 19, 2019, beating the previous 21-day recordset by the 1995-1996 shutdown. The shutdown left an estimated 380,000 government employeeslocked out of work without pay and an even greater 420,000 employees working for no compensation at all, including employees of the IRS. With one of the United States’ most important governmental bodies being almost completely stalled by a lapse in funding, it begs the question: what happens to taxes during a shutdown?