Key Takeaways
- Courts Reject Challenges to CTA
- ACA’s Enhanced Premium Tax Credit Future
- Tariffs
- Foreign Digital Services Retaliation
- OECD Pillar 2 Commitment
- Fees for S Corp Ruling Requests
- In the Courts
- Maple Syrup
Courts Reject Challenges to CTA
Corporate Transparency Act Block Lifted After Trump Rule Shakeup – John Woolley & Tristan Navera, Bloomberg ($):
The act—which requires companies to report their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network—"facially regulates economic activity,” the US Court of Appeals for the Eleventh Circuit said. Therefore, the constitutional challenges to the law fail, the appeals court said, remanding the case to the US District Court for the Northern District of Alabama and lifting that court’s stay on enforcement.
“By requiring these corporate entities to provide beneficial ownership information, the CTA regulates how they operate and the level of secrecy with which they do business,” Judge Andrew L. Brasher wrote for the court. “The maintenance and operation of a separate corporate entity is comparable to other regulated activities the Supreme Court has found commercial in nature.”
Eleventh Circuit Rejects Constitutional Challenges to CTA – Amanda Athanasiou, Tax Notes ($). “The Eleventh Circuit found that the Corporate Transparency Act (CTA) is within Congress’s interstate commerce authority and doesn’t violate the Fourth Amendment facially, overturning a district court decision in favor of a small business advocacy group.”
Corporate Transparency Act Is Constitutional, 11th Circ. Says – Kevin Pinner, Law 360 ($). “The Corporate Transparency Act is constitutional because it regulates economic activities with a substantial impact on interstate commerce and doesn't violate protections against unreasonable searches, the Eleventh Circuit said Tuesday, reversing a lower court's decision.”
ACA’s Enhanced Premium Tax Credit Future
House Speaker Johnson rebuffs efforts to extend health care subsidies, pushing ahead with GOP plan – Kevin Freking & Lisa Mascaro, Washington Post:
Speaker Mike Johnson had discussed the prospect of allowing more politically vulnerable GOP lawmakers a chance to vote on their amendment that would temporarily extend pandemic-era subsidies for ACA coverage. But after days of private talks, leadership sided with the more conservative wing of the conference, which has assailed the subsidies as propping up a failed ACA marketplace.
Enhanced Premium Tax Credit Headed Toward Expiration – Katie Lobosco, Tax Notes ($):
As a result, Affordable Care Act enrollees will see premiums increase by more than double, on average, for the 2026 coverage year, and 2.2 million people are expected to go without health insurance.
Obamacare Tax Credits Won’t Get House Vote After GOP Meltdown – Erin Durkin & Maeve Sheehey, Bloomberg ($):
The Rules Committee vote is another nail in the coffin of the Affordable Care Act premium tax credits slated to dry up at the end of the month. With just three days left in the session before the House adjourns for the year, it looks increasingly unlikely that moderate Republicans who support the subsidies will get a chance to save them from expiration. A large swath of conservatives, including House Republican leaders, opposes an extension.
Tariffs
Trump Dangles Cash Payments to Buoy Voters’ Views of the Economy – Tony Romm & Andrew Duehren, New York Times:
So Mr. Trump has reprised a familiar political strategy: promise people cash.
The White House is trying to tamp down Americans’ economic anxieties by dangling the prospect of checks and other paydays next year, hoping that the money might assuage voters who blame the president for their rising cost of living.
Foreign Digital Services Retaliation
US Threatens to Retaliate Against EU Firms Over Digital Tax – Jennifer A. Dlouhy & Tyler Kendell, Bloomberg ($):
“If the EU and EU Member States insist on continuing to restrict, limit, and deter the competitiveness of U.S. service providers through discriminatory means, the United States will have no choice but to begin using every tool at its disposal to counter these unreasonable measures,” the Office of the US Trade Representative said in a social media post on Tuesday.
U.S. Trade Rep Threatens EU Over Digital Services Restrictions – Jonathan Curry, Tax Notes ($). “The United States is contemplating taking actions against some foreign digital services providers as retaliation for the EU’s alleged mistreatment of U.S. companies, according to the top U.S. trade official.”
OECD Pillar 2 Commitment
Bessent Calls for Holdouts to Join OECD Pillar 2 Deal Soon – Stephanie Soong, Tax Notes ($):
In a December 15 post on social platform X, Bessent said that he told EU ambassadors to the United States that the U.S. government is keenly interested in “this week’s finalization of the side-by-side agreement for the Pillar 2 global minimum tax.”
Fees for S Corp Ruling Requests
AICPA Seeks Reduced Fee for Some S Corp Ruling Requests – Kristen A. Parillo, Tax Notes ($):
“Creating a distinct category for these narrowly defined cases would better reflect the actual time and resources needed to process them and would align with the Service’s guiding principles for determining user fees,” the AICPA said in a December 15 letter to Treasury and the IRS.
In the Courts
Tax Court OKs Disregarding Pot Seller’s Expenses in OIC Review – Chandra Wallace, Tax Notes ($). “The IRS can adopt and implement a policy of disregarding expenses incurred in the sale of illegal drugs when computing a taxpayer’s reasonable collection potential for an offer in compromise, the Tax Court held.”
Split Tax Court Backs IRS In Dispensary's Collection Dispute – Kat Lucero, Law 360 ($). “A San Francisco marijuana dispensary's expenses found to be tied to trafficking in controlled substances are not deductible, a Tax Court majority ruled Tuesday, favoring the IRS' move to not account those costs in calculating an amount to settle the business' 2016-2020 tax debt.”
Split Tax Court Backs IRS Denying Compromise With Marijuana Shop – Tristan Navera, Bloomberg ($). “The IRS properly applied a Tax Code provision forbidding tax breaks when it rejected a marijuana business’s attempt to settle debts, a split Tax Court ruled.”
Trade Court Rejects Injunction In Trump Tariff Suit – Dylan Moroses, Law 360 ($). “The U.S. Court of International Trade has denied a preliminary injunction in a suit challenging President Donald Trump's emergency tariffs after auto part retailers failed to convince the court that the relief was necessary to preserve their potential right to refunds.”
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