Key Takeaways
- IRS begins employee furloughs today.
- Trump says IRS Commissioner will still be nominated.
- Concerns with new IRS CEO dual role.
- OBBBA and clean energy.
- Tax policy considerations of excise tax.
- IRS provides excise tax penalty relief for certain transfers.
- International top spinning day!
Leadership Changes at the IRS
Trump Will Still Nominate an IRS Commissioner, Senate Office Says - Cady Stanton, Tax Notes ($):
Treasury reassured a top Senate taxwriter that the Trump administration will put forth a new nominee for IRS commissioner despite the recent creation of a chief executive officer role at the agency.
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The reassurance comes after Treasury announced October 6 that Social Security Administration Commissioner Frank Bisignano will serve in the newly created IRS role — alongside his Senate-confirmed role at the SSA — overseeing day-to-day operations at the IRS while reporting to Treasury Secretary Scott Bessent. Bessent has served as acting IRS commissioner since August 8.
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The reassurance comes after Treasury announced October 6 that Social Security Administration Commissioner Frank Bisignano will serve in the newly created IRS role — alongside his Senate-confirmed role at the SSA — overseeing day-to-day operations at the IRS while reporting to Treasury Secretary Scott Bessent. Bessent has served as acting IRS commissioner since August 8.
IRS CEO’s Dual Role Heightens Worries About Tax Data Sharing - Trevor Sikes, Tax Notes ($):
Bisignano will serve as the CEO of the IRS under Treasury Secretary Scott Bessent and oversee day-to-day operations at the IRS while continuing to lead the SSA.
Questions have been raised regarding how Bisignano will run both agencies effectively and whether his dual role would create a conflict of interest when the SSA seeks access to protected taxpayer data.
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Bisignano’s dual role also highlights another concern — the ongoing lawsuits about the two agencies’ sharing of tax data with ICE.
The SSA has recently been accused of agreeing to share tax data with ICE in contravention of section 6103. The allegations stem from a letter provided by the SSA detailing its proposed review and approval of up to 50,000 monthly information sharing requests from ICE.
Questions have been raised regarding how Bisignano will run both agencies effectively and whether his dual role would create a conflict of interest when the SSA seeks access to protected taxpayer data.
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Bisignano’s dual role also highlights another concern — the ongoing lawsuits about the two agencies’ sharing of tax data with ICE.
The SSA has recently been accused of agreeing to share tax data with ICE in contravention of section 6103. The allegations stem from a letter provided by the SSA detailing its proposed review and approval of up to 50,000 monthly information sharing requests from ICE.
OBBBA's effect on Clean Energy
IEA Cuts U.S. Renewable Energy Growth Outlook on Trump Policies - Giulia Petni, Wall Street Journal:
The International Energy Agency slashed its forecast for renewable energy capacity growth in the U.S. this decade, citing the early phase-out of federal tax incentives and regulatory shifts under the Trump administration.
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President Trump has vowed to boost the oil-and-gas industry, in part by cutting support for renewable-energy and emissions-reduction initiatives. A key factor in the U.S. downgrade was the “One Big Beautiful Bill Act,” the IEA said, which has accelerated the phase out of tax credits and imposed new construction-start requirements for wind and solar PV projects.
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President Trump has vowed to boost the oil-and-gas industry, in part by cutting support for renewable-energy and emissions-reduction initiatives. A key factor in the U.S. downgrade was the “One Big Beautiful Bill Act,” the IEA said, which has accelerated the phase out of tax credits and imposed new construction-start requirements for wind and solar PV projects.
Trump axed the EV tax break. Can states replace it? - David Ferris, Politico:
Many automakers are now offering their own $7,500 purchase incentives, though those could end any time. Many states and electric utilities offer lower-profile kinds of aid to the EV transition, such as credits for electric school buses or heavy duty trucks, or rebates on home EV chargers. And a federal tax credit on EV chargers doesn’t sunset until next summer.
Whether it’s enough to keep America’s EV momentum going is another question.
The Harris Poll asked Americans last month whether they would consider buying an EV without the federal tax credit. More than a quarter of prospective new EV buyers — 27 percent — said they wouldn’t. The number rose to 41 percent among potential used EV buyers, who until last week got a $4,000 tax rebate from Uncle Sam.
Whether it’s enough to keep America’s EV momentum going is another question.
The Harris Poll asked Americans last month whether they would consider buying an EV without the federal tax credit. More than a quarter of prospective new EV buyers — 27 percent — said they wouldn’t. The number rose to 41 percent among potential used EV buyers, who until last week got a $4,000 tax rebate from Uncle Sam.
Tax Policy - The Use of Excise Tax
What Should Be Done with Excise Tax Revenue? - Adam Hoffer, Tax Foundation:
Excise taxes remain a powerful fiscal tool, capable of raising substantial government revenues while shaping consumer behavior and addressing social costs. Yet, the question of how best to use these revenues is far from simple. Earmarking excise revenues for related programs—whether road maintenance funded by fuel taxes or cessation programs funded by tobacco taxes—can make intuitive sense and strengthen public trust. Still, heavy reliance on excise taxes to fund essential or growing programs is risky. Their narrow and often shrinking tax bases, driven by reduced consumption or technological change, make them unreliable long-term revenue streams.
Excise Tax Penalty Relief
Treasury and the IRS understand there might be challenges implementing the new law and have determined it is in the interest of sound tax administration to provide limited penalty relief related to remittance transfer tax deposits.
Notice 2025-55 provides limited penalty relief for remittance transfer providers who fail to deposit the correct amount of remittance transfer tax as required during the first three quarters of 2026. Specifically, these providers may avoid deposit penalties if they:
- Make timely deposits, even if they are incorrectly calculated, and
- Ultimately pay the full amount of any underpayment by the due date of Form 720, Quarterly Federal Excise Tax Return PDF, for the quarter.
Notice 2025-55 provides limited penalty relief for remittance transfer providers who fail to deposit the correct amount of remittance transfer tax as required during the first three quarters of 2026. Specifically, these providers may avoid deposit penalties if they:
- Make timely deposits, even if they are incorrectly calculated, and
- Ultimately pay the full amount of any underpayment by the due date of Form 720, Quarterly Federal Excise Tax Return PDF, for the quarter.
IRS Provides Grace Period For Int'l Money Transfer Tax Errors - Natalie Olivo, Law 360 Tax Authority ($):
The excise tax requirement falls under Internal Revenue Code Section 4475 , which lawmakers created under the budget reconciliation legislation. In general, the provision requires senders to pay a 1% excise tax on remittance transfers. The bank or other intermediary facilitating the transfer is required to collect and remit the tax on the sender's behalf or face penalties.
According to a statement from the IRS and the U.S. Treasury Department, the guidance allows these providers to temporarily avoid penalties if they make timely but incorrect deposits and ultimately pay the full amount.
According to a statement from the IRS and the U.S. Treasury Department, the guidance allows these providers to temporarily avoid penalties if they make timely but incorrect deposits and ultimately pay the full amount.
In the Tax Courts
Tax Exemption Denial for a Gated Community HOA by the Tax Court - Ed Zollars, Current Federal Tax Developments:
To qualify under § 501(c)(4), an entity must satisfy three criteria: it must be (1) a civic organization, (2) not organized for profit, and (3) operated exclusively for the promotion of social welfare (Treas. Reg. § 1.501(c)(4)-1(a)(1); People’s Educ. Camp Soc’y, Inc. v. Commissioner, 331 F.2d 923, 929 (2d Cir. 1964), aff’g 39 T.C. 756 (1963)).
The critical point of contention was whether the Association operated "exclusively for the promotion of social welfare".
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The Association conceded that it was “not a ’community’ in and of itself.” It argued that public benefit, rather than public access, should be the determining factor. It claimed that the general public received benefits through its facilities (fishing lake, dock, playground) and services (private patrol).
The Court concluded that the Association failed to meet its burden.
The critical point of contention was whether the Association operated "exclusively for the promotion of social welfare".
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The Association conceded that it was “not a ’community’ in and of itself.” It argued that public benefit, rather than public access, should be the determining factor. It claimed that the general public received benefits through its facilities (fishing lake, dock, playground) and services (private patrol).
The Court concluded that the Association failed to meet its burden.
Estate's $17M Transfer Not Tax-Related, 5th Circ. Told - Anna Scott Farrell, Law 360 Tax Authority ($):
The estate of a woman who inherited her husband's oil business and was the victim of elder abuse told the Fifth Circuit that it had multiple reasons unrelated to avoiding estate tax for setting up a partnership and transferring $17 million into it just before she died.
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In addition to asking the Fifth Circuit to overturn the Tax Court's ruling that it was ineligible for the Section 2063 exception, the estate also urged the appeals court to find that the estate should not have been charged related penalties. The estate acted in good faith and had reasonable cause when it didn't include the assets transferred to the partnership in the estate's value, it argued.
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In addition to asking the Fifth Circuit to overturn the Tax Court's ruling that it was ineligible for the Section 2063 exception, the estate also urged the appeals court to find that the estate should not have been charged related penalties. The estate acted in good faith and had reasonable cause when it didn't include the assets transferred to the partnership in the estate's value, it argued.
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