Tax Update (October 5)
On Thursday (Oct. 1), President Trump signed a continuing resolution (CR) to keep the government funded until Dec. 11, 2020. The Senate passed the CR 84-10 on Wednesday (Sep. 30).
On Thursday (Oct. 1), House Speaker Pelosi said that Republicans are reluctant of Democratic demands to scale back net operating loss provisions that were included in the CARES Act. Pelosi said Republicans rejected her demands on expanding the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).
“We not only have a dollars debate — we have a values debate,” Pelosi said. “We do come at it from two different places,” she added.
Late Thursday (Oct. 1) night, the House voted 214-207 to pass a $2.2 trillion revised HEROES Act. The package includes around $500 billion for state and local governments, $600 weekly unemployment benefits, another round of $1200 stimulus checks, $75 billion for COVID-19 testing, election security, rental assistance, and funds for schools and the postal service. Additionally, the package had emergency bailout funds for restaurants and the airline industry.
The vote occurred after last minute negotiations between House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steve Mnuchin broke down. Mnuchin offered a $1.6 trillion package, which Pelosi said was too small. Negotiations between Pelosi and Mnuchin are still ongoing as of Friday (Oct. 2) afternoon.
To view the revised HEROES Act, click here.
To view a section-by-section summary, click here.
China Task Force
On Wednesday (Sep. 30) the House Republican China Task Force (CTF) released its report that included more than 400 recommendations to address China’s economic and national security challenges to the U.S. The report addresses national security concerns, human rights violations, supply chain issues, China’s COVID-19 response, and the expanded influence of China. Chairman of the task force Rep. Mike McCaul (R-TX) said the two thirds of the recommendations in the report are bipartisan.
The report has specific recommendations that fall into the jurisdiction of the House Ways and Means Committee. Some of the recommendations include doubling the research and development tax credit, designing tax incentives to encourage domestic production of advanced semiconductors, keeping tax rates globally competitive, and allowing companies to bring intellectual property back to the U.S. without immediate tax consequences.
To view the CTF recommendations for the Ways and Means Committee, click here.
To view the full CTF report, click here.
Trump Tax Returns
On Wednesday (Sep. 30), House Ways and Means Chairman Richard Neal (D-MA) said he does not believe the Joint Committee on Taxation (JCT) possesses President Trump’s tax returns. A New York Times article published on Sunday (Sep. 27) suggested that JCT is blocking the release of a close to $73 million refund to Trump that has been subject to an audit battle with the IRS. The article said that Trump paid $750 in income taxes in 2016 and 2017 and zero dollars in income taxes in 10 of the last 15 years.
On Wednesday (Sep. 30), House Ways and Means Oversight Subcommittee Chairman Bill Pascrell (D-NJ) sent a letter to IRS Commissioner Charles Rettig to request his appearance before the subcommittee to address Trump’s tax returns. Pascrell said if left unaddressed, the reports on Trump’s taxes will threaten public confidence in the IRS.
To view Pascrell’s letter to Rettig, click here.
On Friday (Oct. 2), the Bureau of Labor Statistics released the September jobs report that found the U.S. economy added 661,000 jobs and the unemployment rate declined to 7.9 percent. It indicates a slowdown in monthly job growth from the 4.8 million jobs added in June and 1.5 million jobs added in August. The economy is still 10 million jobs short of restoring the nearly 22 million jobs lost due to the COVID-19 pandemic. This is the last monthly report before the election.
To view the Bureau of Labor Statistics jobs report, click here.
On Tuesday (Sep. 29), the JCT announced in a press release that it had revised and modernized its website. The updated website offers increased compatibility with mobile devices and the JCT plans to continue to improve the website and add features.
To view the updated website, click here.
On Wednesday (Sep. 30), the new Belgium government announced it will impose a digital tax by 2023 if no international deal is reached, according to a draft coalition agreement. The draft said the government would prefer an international agreement and Belgium will “take the lead” in international discussions on a digital tax.
“The advanced digitization of our society has shown that the traditional international and national tax rules are not aligned with the digital economy,” the agreement states. “Companies active in the digital economy all too often don’t pay taxes at the place where the value is created (where the users are located). This can lead to unfair competition,” the document adds.
The IRS is working on new guidance for third-party reporting for cryptocurrency transactions. The move is in response to a Treasury Inspector General for Tax Administration report that found many cryptocurrency transactions do not get reported to the IRS. One of the recommendations in the report was to develop new guidance to close current gaps on reporting virtual transactions.
To view the Treasury Inspector General for Tax Administration report, click here.
Early Friday (Oct. 2) morning, President Trump tweeted that he and the first lady tested positive for COVID-19. White House Chief of Staff Mark Meadows said Trump is experiencing mild symptoms.
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 Faler, Brian. “Neal: Congressional tax office doesn’t have Trump’s tax returns.” Politico Pro, 30 Sep. 2020. https://link.edgepilot.com/s/8ea37f66/VAGq9FAH6U_grzwrnzrtHg?u=https://subscriber.politicopro.com/article/2020/09/neal-congressional-tax-office-doesnt-have-trumps-tax-returns-2002960
 Lorenzo, Aaron. “Pascrell demands IRS commissioner testify on Trump tax returns.” Politico Pro, 30 Sep. 2020. https://link.edgepilot.com/s/951b41a6/QIpol-fO3EekAJWvLrunjQ?u=https://subscriber.politicopro.com/article/2020/09/pascrell-demands-irs-commissioner-testify-on-trump-tax-returns-3984287
 Moens, Barbara. “Belgium to impose digital tax by 2023 if no international deal.” Politico Pro, 30 Sep. 2020. https://link.edgepilot.com/s/6d52bb64/wnRuSVR7OUaK_habR4qEJg?u=https://subscriber.politicopro.com/article/2020/09/belgium-to-impose-digital-tax-by-2023-if-no-international-deal-3984258
 Becker, Bernie. “IRS working on new reporting guidance for cryptocurrency.” Politico Pro, 1 Oct. 2020. https://link.edgepilot.com/s/846650f1/FF2ajb0QgkWWbFoLSlJOYw?u=https://subscriber.politicopro.com/article/2020/10/irs-working-on-new-reporting-guidance-for-cryptocurrency-3984322