Tax News & Views Accounting for a Shutdown Breakthrough Roundup

Senate takes first step toward ending the government shutdown - Mary Clare Jalonick and Lisa Mascaro, Associated Press:

In a test vote that is the first in a series of required procedural maneuvers, the Senate voted 60-40 to move toward passing compromise legislation to fund the government and hold a later vote on extending Affordable Care Act tax credits that expire Jan. 1. Final passage could be several days away if Democrats object and delay the process.

The agreement does not guarantee the health care subsidies will be extended, as Democrats have demanded for almost six weeks. Senate Democratic leader Chuck Schumer of New York voted against moving ahead with the package, along with all but eight of his Democratic colleagues.

First, some quick facts- Jack Blanchard and Dasha Burns, Politico:

The government is still closed for now. The Senate will pick back up at 11 a.m. and requires more votes to get its side done. The numbers are there, but the timetable remains uncertain. The House then needs to pass the bill, with Speaker Mike Johnson targeting Wednesday for a single-day vote. He should be able to get it through, but it’ll be tight. Plenty of people now believe the government will be open by the end of this week. POLITICO’s Inside Congress has more on the shutdown endgame

Six Takeaways From the Senate Deal to End the Shutdown - Michael Gold, New York Times:

Though health care was their major focus, Senate Democrats won some concessions in their fight against the Trump administration’s concerted effort to reconfigure and diminish the federal government.

Their biggest win was language that would restore the jobs of thousands of federal workers who were laid off during the shutdown and bar further reductions-in-force through Jan. 30, while guaranteeing back pay for hundreds of thousands of others who were furloughed, as required by law.

The group of moderate senators that negotiated an end to the shutdown also protected the Government Accountability Office, an agency that helps Congress keep track of federal spending. The G.A.O. has run afoul of Mr. Trump and his allies after it twice this year concluded that the president violated rules that prohibit him from unilaterally canceling funding.

Tax Court Cancels Third Wave of Trial Sessions - Mary Katherine Browne, Tax Notes ($):

The court November 7 announced the cancellation of four trial sessions for the week of November 17. The decision affects trial sessions scheduled for Denver, Detroit, New York, and San Francisco.

...

The court plans to set future trial dates for continued cases “as soon as practical.”

The Tax Court will continue to remain open for business, and taxpayers can still file with the clerk’s office, according to its website.

Storm Deadline Extensions for Parts of the Dakotas and Alaska

IRS announces tax relief for taxpayers impacted by severe storms and flooding in Sisseton-Wahpeton Oyate of the Lake Traverse Reservation; various deadlines postponed to Feb. 2, 2026 - IRS:

The Internal Revenue Service announced today tax relief for individuals and businesses in the Sisseton-Wahpeton Oyate Tribal Nation affected by severe storms and flooding that began on June 12, 2025. These taxpayers now have until Feb.2, 2026, to file various federal individual and business tax returns and make tax payments.

...

As a result, affected individuals and businesses will have until Feb. 2, 2026, to file returns and pay any taxes that were originally due during this period.

The Feb. 2, 2026, deadline applies to individual income tax returns and payments normally due on or after June 12, 2025. The Feb. 3 deadline also applies to 2025 contributions to IRAs and health savings accounts for eligible taxpayers. This relief also applies to the estimated tax payments normally due on June 16, and Sept. 15, 2025, and Jan 15, 2026. Penalties on payroll and excise tax deposits due on or after June 12, 2025, and before June 27, 2025, will be abated as long as the tax deposits are made by June 27, 2025.

IRS announces tax relief for taxpayers impacted by severe storms, flooding and remnants of Typhoon Halong in Alaska; various deadlines postponed to May 1, 2026 - IRS. "The Internal Revenue Service announced today tax relief for individuals and businesses in the Lower Kuskokwim Regional Educational Attendance Area, Lower Yukon Regional Educational Attendance Area, and Northwest Arctic Borough affected by severe storms, flooding and remnants of Typhoon Halong that began on Oct. 8, 2025. These taxpayers now have until May 1, 2026, to file various federal individual and business tax returns and make tax payments."

Trump Floats Tariff Stimmys, Pricey Pasta

Trump Suggests $2,000 Payouts to Americans as He Defends Tariffs - Alyssa Lukpat, Wall Street Journal:

Days after the Supreme Court appeared skeptical of the legal backing for many of his tariffs, the president on social media Sunday lauded the revenue they have brought in and said the government would soon begin paying down the country’s debt. He also said a payment of at least $2,000 would be made to everyone but high-income earners.

“People that are against tariffs are fools! We are now the richest, most respected country in the world, with almost no inflation, and a record stock market price,” Trump wrote in a post on Truth Social. “A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.”

Trump didn’t offer further details about the payouts or who would qualify for them.

Donald Trump Stimulus Check Update Given By Scott Bessent - Hugh Cameron, Newsweek (my emphasis):

Scott Bessent has given an update on the $2,000 stimulus checks President Donald Trump proposed paying out using the revenue raised from his tariffs.

In an interview with ABC News on Sunday, the Treasury Secretary said he had not discussed the idea with the president but that the tariff dividends could arrive "in lots of forms," including via the tax cuts already enacted through the One Big Beautiful Bill Act.

"It could be just the tax decreases that we are seeing on the president's agenda. You know, no tax on tips, no tax on overtime, no tax on Social Security, deductibility of auto loans," Bessent told host George Stephanopoulos. "So, you know, those are substantial deductions that, you know, are being financed in the tax bill."

So maybe the real rebates are the friends we've made along the way.

Italian Pasta Is Poised to Disappear From American Grocery Shelves - Margherita Stancati and Gavin Bade, Wall Street Journal:

Italy’s biggest pasta exporters say import and antidumping duties totaling 107% on their pasta brands will make doing business in America too costly and are preparing to pull out of U.S. stores as soon as January. The combined tariffs are among the steepest faced by any product targeted by the Trump administration.

“It’s an incredibly important market for us,” said Giuseppe Ferro, La Molisana’s chief executive, whose family-run pasta factory sits on the edge of the southern Italian town of Campobasso. “But no one has those kinds of margins,” he said, shaking his head as the sweet, nutty smell of freshly ground wheat berries permeated his factory.

The U.S. Commerce Department has announced a 92% antidumping duty on pasta made in Italy by La Molisana and 12 other companies, which import the bulk of pasta from Italy to the U.S. That is on top of the Trump administration’s 15% tariff on imports from the European Union.

IRS Foot-Faults into a $77M loss

IRS Loses $76.5 Million Easement Case Because of Untimely Notice - Kristen Parillo, Tax Notes ($):

The IRS’s final adjustment notice to a conservation easement partnership was untimely under a recent Tax Court opinion holding that a Treasury regulation unlawfully extended the statutory adjustment period, the Tax Court held.

In a November 5 order and decision in Bayou Serpent Property LLC v. Commissioner, Judge Jeffrey S. Arbeit granted the partnership’s unopposed summary judgment motion, thereby ending the case in its favor.

Arbeit agreed with Bayou Serpent Property LLC’s argument that the IRS’s notice of final partnership adjustment (FPA) was issued too late under the rules governing the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015. The BBA rules, which took effect for tax years beginning in January 2018, replaced the audit regime created by the 1982 Tax Equity and Fiscal Responsibility Act.

Conservation easement cases before the Tax Court often involve absurd valuations based on the assumed profitability of non-existent businesses on the land. If this were the case, it would mean IRS foot-faulted out of a lot of money.

Blogs and Bits

Who Has the Authority to Levy Tariffs? - Alex Durante and Erica York, Tax Foundation. "A Supreme Court decision permanently enjoining the IEEPA tariffs would provide immediate relief to businesses and consumers and would hamstring the president’s ability to impose tariffs this broad in scope."

IRS FAQs Clarify OBBBA Limitation on Certain Employee Retention Credit Claims - Parker Tax Pro Library. The One, Big, Beautiful Bill Act (OBBBA) introduced new enforcement provisions affecting the employee retention credit (ERC). One of these provisions, Section 70605(d) of the OBBBA, prevents the IRS from allowing or refunding ERCs after July 4, 2025, for the third and fourth quarters of 2021 if those claims were filed after January 31, 2024, even if a taxpayer otherwise met eligibility requirements.

A Complicated U.S. Tax Life: Foreign Spouses And Community Property - Virginia La Torre Jeker, US Tax Talk. "Most Americans associate community property with U.S. states such as California, Washington or Texas. Community property rules also operate in many foreign countries, predominantly those following civil law systems. "

Tax News Roundup - November 2025 - Thomas Gorczynski, Tom Talks Taxes. "In Notice 2025-62, the IRS stated it will not impose penalties on employers and payors who do not report amounts reasonably designated as qualified overtime compensation."

New York's Tenacious Tax Grip: Lessons From The Hoff Domicile Dispute - Peter Reilly, Forbes. "People contemplating the move need to consider how difficult it can be to sever their tax ties with the State of New York. A recent decision by the New York Division of Taxation can give you some sense of that."

Pardon Me

Trump pardons former Mets great Darryl Strawberry on past tax evasion and drug charges - Will Weissert, Associated Press:

President Donald Trump has pardoned former New York Mets great Darryl Strawberry on past tax evasion and drug charges, citing the 1983 National League Rookie of the Year’s post-career embrace of his Christian faith and longtime sobriety.

Strawberry was an outfielder and eight-time All-Star, including seven with the Mets from 1983-90. He hit 335 homers and had 1,000 RBIs and 221 stolen bases in 17 seasons.

Trump Pardons Former Baseball Star Convicted of Tax Evasion - Alexander Rifaat, Tax Notes:

Strawberry pleaded guilty in 1995 to knowingly failing to report more than $350,000 in income from autograph shows and other promotional work between 1986 and 1992, defrauding the government of more than $100,000 in tax revenue.

After his conviction, for which he spent six months under house arrest followed by two years of probation, Strawberry continued to battle the IRS over parts of its assessment. The IRS sued Strawberry over his unpaid tax bill, which eventually led to the agency auctioning off a part of his Mets contract that had been placed into an annuity.

What day is it?

It's International Accounting Day! If you can't get excited about that, I don't know you.

Tax News & Views Accounting for a Shutdown Breakthrough Roundup

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Joe B. Kristan, CPA