Daily Tax Report ®

Supreme Court Peppers IRS With Tough Questions in Tax Rule Fight

Majority of Senate Backs Alcohol Tax Break Extension by Year End

Top Stories

Biden To Make Global Tax Talks Easier, German Minister Says

Joe Biden’s presidency increases the odds of agreement on tax reform within the Organization for Economic Cooperation and Development, Germany’s finance minister said Tuesday.

Bipartisan Senate Group Pitching $908 Billion Stimulus Plan

A bipartisan group of lawmakers in the House and Senate unveiled a $908 billion stimulus proposal Tuesday in an effort to break a months-long impasse that’s now threatening to tip the economy back into contraction.

Billionaires Urge Tax Reform to Free $1 Trillion for Charity

A coalition of billionaires, academics and large foundations says the U.S. could unlock far more money for charity just by tweaking a few tax rules.

HILL TAX BRIEFING: Fight Over Tax Rules Heads to Supreme Court

Read more: House Democrats push for keeping IRS funding steady. The alcohol industry is bracing for the expiration of a prized tax break. The Georgia runoffs hold clues for the 118th Congress.

California Reopens, Expands Small Business Sales Tax Relief

California is reopening and expanding a program to help small businesses weather the pandemic by giving them one year to remit up to $50,000 in sales tax they have collected from customers.

Tech Mogul in Biggest Tax Case Facing Dementia, Lawyers Say

Robert Brockman, the software executive charged in the largest-ever tax case against a U.S. individual, is facing progressive dementia that will render him unable to help in his defense, according to a legal filing citing his doctors.

Treasury Faces Challenge to Dividend-Deduction Rules

A telecommunications company has sued for a $109 million refund of taxes, penalties, and interest in a legal challenge to temporary regulations that limit the deduction taxpayers can get on certain foreign dividends.

Local Lenders Stay Sidelined as Cash Flows to Opportunity Zones

Lenders that have historically provided capital to underserved areas—the focus of the opportunity zone tax breaks—have struggled to get involved in the burgeoning market for the tax-advantaged investments.

A Biden Administration Should Delay Taxes, Says Hubbard

Nov.06 -- Glenn Hubbard, former chairman of the Council of Economic Advisers, says a Biden administration would be wise to delay raising taxes to focus on a recovery package because of the likelihood for bipartisan support. He joins David Westin on "Bloomberg Wall Street Week."

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Future of U.S. Tax Reform

Wall Street Votes: Trump, Biden's Tax Policies

Retroactive Capital Gains Tax Would Be Nightmare: Adam Sender

Aperture CEO Kraus Says Wealth Tax Won’t Happen

Trump Says He'll Release Tax Returns 'as Soon as I Can'

Nasdaq 'Clearly' Opposes New Jersey Tax Plan, Says CEO Friedman

How the U.S. Tax System Fostered the Rise of the Wealthy

Trump Stops Stimulus Talks Until After Election

Gov. Murphy Says Property Taxes Driving Retirees Out of N.J.

Podcasts

Census Case Leads Off Latest Week of SCOTUS Arguments

Biden's Tax Policy Vision May Never Be Realized

Tax Developments

IRS Notice: Calendar Year 2021 Tier 2 Tax Rates Published (IRC §3241)

Calendar year 2021 tier 2 tax rates as required by tax code Section 3241(d), the IRS provided December 1. Tier 2 taxes on railroad employees, employers, and employee representatives are one source of funding for benefits under the Railroad Retirement Act. The tier 2 tax rates for calendar year 2021 apply to compensation paid in calendar year 2021. The tier 2 tax rate for 2021 under Section 3201(b) on employees is 4.9 percent of compensation. The tier 2 tax rate for 2021 under Section 3221(b) on employers is 13.1 percent of compensation. The tier 2 tax rate for 2021 under Section 3211(b) on employee representatives is 13.1 percent of compensation. [IRS Notice, 85 Fed. Reg. __ (Dec. 2, 2020)]

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IRS Form: Agricultural Employers Annual Tax Return (IRC §3121)

Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees, and instructions released November 30 with significant changes to allow for the reporting of new employment tax credits and other tax relief related to Covid-19. The form has new lines for reporting: (1) the new credit for qualified sick and family leave wages; and (2) the new employee retention credit. A new worksheet helps determine the appropriate amount of the credits to report. Additionally, new lines are used to report employers, including government employers, deferral of the withholding and payment of the employee share of Social Security tax depending on the dates paid during 2020. The amount of all advances received from Forms 7200, Advance Payment of Employer Credits Due to COVID-19, filed for the year is reported on line 14g. [IRS Form 943 (2020), Instructions for Form 943]

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Case: Alleged Illegal Withholding Failed to State a Claim for Relief (E.D. Mich.) (IRC §7421)

Simple allegation that IRS improperly withheld on a taxpayer’s income does not properly state a claim for relief, a district court held. Taxpayer alleged that the IRS increased his federal income tax burden by improperly withholding income without his permission and requested a refund. Taxpayer failed to file a return for 2016 despite working and earning $100,000. Taxpayer did have a Form W-4 on file with his employer. The IRS determined that Taxpayer was not entitled to claim certain exemptions or allowances and sent his employer IRS Letter 2800C (Lock-in Letter) specifying Taxpayer’s withholding rate and allowances. Taxpayer requested a deviation from the Lock-in Letter that the IRS denied. Taxpayer claims the increased withholding causes irreparable harm to his lifestyle and seeks an injunction preventing the withholding and a refund of over withheld taxes. Without more, an allegation that a tax has been erroneously or illegally assessed is not enough to overcome the Anti-Injunction Act, the district court held in dismissing Taxpayer’s claims. The complaint established no facts showing that the taxes were illegally withheld or collected, the court determined. The Anti-Injunction Act bars a party’s attempt to challenge the acceptance of a Form W-4, the court concluded. Taxpayer also failed to establish that he has suffered irreparable harm because of his current tax burden, the court stated. Simply calling the IRS withholding office seeking a deviation is not exhausting administrative remedies allowing for a refund under tax code Section 7422 or damages under Section 7433, the court held. [Sikora v. United States, No. 19-12608 (E.D. Mich. Nov. 30, 2020)]

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