Key Takeaways
- Trump withdraws top IRS lawyer pick.
- Congress eyeing health care fixes.
- IRS after shutdown.
- Tariff checks said to require legislation.
- Certain tariffs repealed Friday.
- OBBBA and tips & overtime.
- Transportation tax policy.
- National Homemade Bread Day!
IRS Pick Withdrawn
Trump Withdraws His Pick for Top IRS Lawyer - Richard Rubin, Wall Street Journal:
Trump wrote on Truth Social that he was ending Korb’s nomination without providing a reason. The sudden move means continued turmoil at the top ranks of the tax agency, which has seen a revolving door in its most senior jobs all year and the departure of tens of thousands of employees.
Korb was nominated to be the chief counsel, one of two-Senate confirmed posts at the IRS. The chief counsel oversees the IRS’s lawyers, who litigate cases in U.S. Tax Court, write regulations and advise IRS employees on how to apply the tax code.
Korb was nominated to be the chief counsel, one of two-Senate confirmed posts at the IRS. The chief counsel oversees the IRS’s lawyers, who litigate cases in U.S. Tax Court, write regulations and advise IRS employees on how to apply the tax code.
Life Post Shutdown
After The Shutdown, Lawmakers Eye Health Care Fixes - Renu Zaretsky, Tax Policy Center:
Racing to find an ACA tax credit compromise. With the enhanced Affordable Care Act (ACA) premium tax credit set to expire at year’s end, lawmakers are scrambling to agree on a path forward. Several House proposals would extend the credit, some with new income caps, from six times the federal poverty level to ten times.
IRS Aims to Send Most Back Pay by November 19 - Benjamin Valdez, Tax Notes ($):
The IRS is gearing up to pay back employees who were furloughed during the longest government shutdown in history.
In an email sent to all employees on November 14, the IRS said it anticipates that the majority of back pay will be paid on November 19. Employees can expect to receive the rest of their pay by November 24, according to a FAQ on the agency’s internal site viewed by Tax Notes.
In an email sent to all employees on November 14, the IRS said it anticipates that the majority of back pay will be paid on November 19. Employees can expect to receive the rest of their pay by November 24, according to a FAQ on the agency’s internal site viewed by Tax Notes.
More on Tariffs
Bessent: $2K tariff checks will require legislation in Congress - Sarah Fortinsky, The Hill:
Treasury Secretary Scott Bessent said on Sunday that President Trump’s proposal to send $2,000 to most Americans will first require Congress to pass legislation.
...
The renewed focus on affordability comes after Democrats’ sweeping victories in this month’s elections, with many successful candidates running disciplined campaigns focused on affordability.
...
The renewed focus on affordability comes after Democrats’ sweeping victories in this month’s elections, with many successful candidates running disciplined campaigns focused on affordability.
Trump cuts tariffs on scores of products in bid to lower prices - Julia Manchester, The Hill:
President Trump signed an executive order Friday cutting tariffs on scores of products in a bid to lower some grocery prices following frustration from voters over exceedingly higher costs.
The products that are no longer subject to tariffs, include coffee, tea, beef, bananas, tropical fruit, wood and iron.
The products that are no longer subject to tariffs, include coffee, tea, beef, bananas, tropical fruit, wood and iron.
Trump repeals tariffs on some foods as Americans face high grocery prices - Alec Dent and David Lynch, Washington Post:
The Trump administration has maintained its stance that tariff costs aren’t passed onto consumers. But an early April analysis from Yale University found that price increases from tariffs would cost the typical U.S. household $3,800 this year.
A majority of Americans say they are spending more on groceries than they were last year and they blame Trump for the increased costs, according to a Washington Post-Ipsos poll conducted in late October.
Critics of Trump’s tariffs celebrated the move and called on the president to end his other tariffs as well.
A majority of Americans say they are spending more on groceries than they were last year and they blame Trump for the increased costs, according to a Washington Post-Ipsos poll conducted in late October.
Critics of Trump’s tariffs celebrated the move and called on the president to end his other tariffs as well.
What’s Next for Tariffs After the Supreme Court Hearing? - Mindy Herzfeld, Tax Notes ($):
The Trump administration appears to recognize that imposing tariffs on other countries’ goods may prompt them to reciprocate by imposing tariffs of their own on imports of digital services, such as through DSTs. Some recently negotiated framework trade agreements include language that restricts other countries from imposing DSTs or other taxes on digital services. But that negotiating approach has had spotty success.
The Court’s decision on IEEPA could prompt Congress to act in a manner that would restrict the president’s ability to prompt retaliation as a result of his imposition of arbitrary tariff duties, and in so doing, protect U.S. trade in services from facing reciprocal tariffs in other countries.
The Court’s decision on IEEPA could prompt Congress to act in a manner that would restrict the president’s ability to prompt retaliation as a result of his imposition of arbitrary tariff duties, and in so doing, protect U.S. trade in services from facing reciprocal tariffs in other countries.
OBBBA - Tips and Overtime
Tips and Overtime Concerns Remain Despite Penalty Relief - Trevor Sikes, Tax Notes ($):
Notice 2025-62, 2025-48 IRB 1, “provides very welcome relief that no penalties will be assessed for failing to report qualifying overtime or qualifying tips,” according to Michael K. Mahoney of Ogletree Deakins, who said “the IRS is really giving some breathing room to employers in 2025.”
...
Notice 2025-62 only gives reprieve for penalties under sections 6721 or 6722 to employers for returns filed in 2025.
“Businesses need to be mindful that 2026 is quickly approaching, and they need to be mindful of their obligation to report, considering the system adjustments that need to be made,” Mahoney said.
...
Notice 2025-62 only gives reprieve for penalties under sections 6721 or 6722 to employers for returns filed in 2025.
“Businesses need to be mindful that 2026 is quickly approaching, and they need to be mindful of their obligation to report, considering the system adjustments that need to be made,” Mahoney said.
Tax Policy - Transportation
How to Refuel the Highway Trust Fund - Alex Muresianu and Jacob Macumber-Rosin, Tax Foundation:
Current highway authorization is scheduled to expire on September 30, 2026.[1] The legislative process for reauthorization is an opportunity to address structural problems with transportation funding and revenue collection.
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A VMT tax is the most efficient and sustainable option for US highway funding amid rapidly changing markets and technologies. It best achieves the user-pays principle, aligning taxes paid with actual road use, vehicle weight, and infrastructure costs.
That said, a full VMT system would be complex to establish and administer. A hybrid approach, replacing truck-related excise taxes with a VMT tax on freight, retaining the gas tax, and adding flat registration fees on passenger traffic, delivers most of the same benefits with fewer administrative challenges.
...
A VMT tax is the most efficient and sustainable option for US highway funding amid rapidly changing markets and technologies. It best achieves the user-pays principle, aligning taxes paid with actual road use, vehicle weight, and infrastructure costs.
That said, a full VMT system would be complex to establish and administer. A hybrid approach, replacing truck-related excise taxes with a VMT tax on freight, retaining the gas tax, and adding flat registration fees on passenger traffic, delivers most of the same benefits with fewer administrative challenges.
There’s a New Effort on the Runway to Raise Climate Fund - Somini Sengupta, New York Times:
Countries currently have a range of existing taxes on aviation. Some tax all flights equally. The 27-country European Union imposes an additional tax on private jets. Maldives has a staggered system of taxes, with private jet passengers paying nearly 10 times what economy class passengers pay. France imposes different fees based on both the class and the distance of the flight: On a per passenger basis, a first-class seat on a short-haul flight is taxed at a higher rate than an economy seat on a long haul. Very few countries use the proceeds from aviation taxes for climate measures.
The would-be premium passenger tax aims to change that.
The would-be premium passenger tax aims to change that.
Blogs & Bits
IRS Issues Applicable Federal Rates (AFR) for December 2025 - Bailey Finney, Eide Bailly:
The Section 7520 rate for December 2025 is 4.60%. Higher Sec. 7520 rates benefit Qualified Personal Residence Trusts (QPRTs) and Charitable Remainder Annuity Trusts (CRATs). Lower Sec. 7520 rates benefit Grantor Retained Annuity Trusts (GRATs), Charitable Lead Annuity Trusts (CLATs) and Private Annuities.
Annual Adjustments to Retirement Plan Limitations: Analysis of Notice 2025-67 for 2026 - Ed Zollars, Current Federal Tax Developments:
The release of Notice 2025-67 provides critical updated figures that must be integrated into 2026 plan administration and tax compliance calculations. The IRS also specified its approach to a potential legislative error in the calculation of the startup cost credit compensation exclusion limit under section 45E(f)(2)(C), stating it will calculate and apply the limitation by substituting “calendar year 2022” for “calendar year 2007” in the COLA calculation methodology. By incorporating these annual COLA adjustments, the IRS ensures that statutory retirement limitations reflect ongoing economic changes.
Analyzing the OBBBA
Is the OBBBA the “Largest Tax Cut in American History?” - Erica York and Emily Kraschel, Tax Foundation:
The tariffs will offset a portion of the OBBBA tax cut provisions, resulting in a net revenue reduction of $2.6 trillion from 2025 through 2034, or 0.73 percent of GDP. The combination ranks as the eighth largest tax cut since 1940, closer in magnitude to the original 2017 TCJA. The OBBBA also included reductions in government spending, offsetting about $1.1 trillion of the deficit impact.
Though it is a significant tax law, the reduction in tax revenue from the OBBBA ranks not as the largest, but as the the sixth largest tax cut in US history. Factoring in the president’s tariff tax increase further drops its ranking to the eighth largest tax cut in US history.
Though it is a significant tax law, the reduction in tax revenue from the OBBBA ranks not as the largest, but as the the sixth largest tax cut in US history. Factoring in the president’s tariff tax increase further drops its ranking to the eighth largest tax cut in US history.
In the Courts
Madoff Victims Lose Bid To Claim $8.2M Theft Loss Deduction - Kat Lucero, Law 360 Tax Authority ($) (Taxpayer names omitted):
A New York couple lost their challenge to claim a $8.2 million theft loss tax deduction on life insurance policies invested in accounts tied to Bernie Madoff's Ponzi scheme after the Second Circuit found that the husband did not own the policies' underlying assets.
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The investments became worthless after authorities discovered that Madoff was running a fraudulent investment scheme in 2008, devaluing Taxpayer's policies by $8.23 million. The couple claimed that amount as a theft loss deduction in their tax return, but the Internal Revenue Service denied it. The Tax Court sided with the IRS after the couple challenged that determination.
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The investments became worthless after authorities discovered that Madoff was running a fraudulent investment scheme in 2008, devaluing Taxpayer's policies by $8.23 million. The couple claimed that amount as a theft loss deduction in their tax return, but the Internal Revenue Service denied it. The Tax Court sided with the IRS after the couple challenged that determination.
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