Key Takeaways
- Continuing Resolution
- Tax Legislation
- IRS
- Healthcare
- Greenhouse Gas
- Research Credit
- Digital Tax
- Electric Trucks
- Superfund Excise Tax
- In the Courts
- Pet Bird Day
Continuing Resolution
Stopgap Bill Would Freeze Last of IRS Long-Term Enforcement Funds – Cady Stanton, Tax Notes ($):
A stopgap government funding bill proposed by Republicans would freeze the remaining enforcement money allocated to the IRS by the Inflation Reduction Act after previous cuts left the pot of funds nearly depleted.
House Republicans released the proposed text of a seven-week continuing resolution September 16 that would freeze — for the second time – $20.2 billion of IRS funds initially granted to the agency in 2022 by the IRA. Under the stopgap bill, a full rescission of the funds wouldn’t be executed until a full-year appropriations bill is passed, according to a House Appropriations Committee aide.
House Republicans released the proposed text of a seven-week continuing resolution September 16 that would freeze — for the second time – $20.2 billion of IRS funds initially granted to the agency in 2022 by the IRA. Under the stopgap bill, a full rescission of the funds wouldn’t be executed until a full-year appropriations bill is passed, according to a House Appropriations Committee aide.
Shutdown Looms as GOP Plan Omits Healthcare Credit Extension – Katie Lobosco, Tax Notes ($):
The chances of a government shutdown are increasing after Republican leadership released a stopgap funding measure without including any of the Democrats’ demands, including an extension of the expiring enhanced premium tax credit.
House Republicans released a continuing resolution September 16 that would extend government funding through November 21 at fiscal 2024 funding levels but will need some Democrats to vote for the measure because of a 60-vote threshold in the Senate.
House Republicans released a continuing resolution September 16 that would extend government funding through November 21 at fiscal 2024 funding levels but will need some Democrats to vote for the measure because of a 60-vote threshold in the Senate.
GOP Unveils Bill to Avert Shutdown, Daring Democrats to Halt – Erik Wasson, Bloomberg ($):
House Republicans unveiled a stopgap spending bill to keep the US government open past an Oct. 1 shutdown deadline, daring Democrats to vote against the measure, which does not contain health-care policies they have demanded.
The short-term legislation would keep agencies operating through Nov. 21 and provide new funding for lawmaker, judicial and administration official security in the wake of the assassination of conservative activist Charlie Kirk last week.
The short-term legislation would keep agencies operating through Nov. 21 and provide new funding for lawmaker, judicial and administration official security in the wake of the assassination of conservative activist Charlie Kirk last week.
Tax Legislation
Senate Bill Would Tuck In $11B IRS Operations Support Clawback – Cady Stanton, Tax Notes ($):
A spending bill that advanced through the Senate Appropriations Committee with bipartisan support would include an $11 billion cut in operations support for the IRS.
Senate appropriators took a quiet swipe at the agency with what would be an $11.7 billion cut to operations support funding for fiscal 2026 given to the IRS in the Inflation Reduction Act buried in an unusual place: the Labor, Health and Human Services, Education, and Related Agencies spending bill. The legislation was advanced by the Senate Appropriations Committee in July on a 26-3 vote.
Senate appropriators took a quiet swipe at the agency with what would be an $11.7 billion cut to operations support funding for fiscal 2026 given to the IRS in the Inflation Reduction Act buried in an unusual place: the Labor, Health and Human Services, Education, and Related Agencies spending bill. The legislation was advanced by the Senate Appropriations Committee in July on a 26-3 vote.
House Panel to Weigh Greater Subpoena Power for Tax Court – Kevin Pinner, Law 360 ($):
House lawmakers are scheduled to consider a bill Wednesday that would grant the U.S. Tax Court the power to issue subpoenas without connection to a scheduled hearing and would apply mandatory recusal rules to its judges, the Joint Committee on Taxation reported Tuesday.
H.R. 5349, the Tax Court Improvement Act, introduced Monday by Rep. Nathaniel Moran, R-Texas, also would grant the court's special trial judges the power to hear any proceeding within its jurisdiction if the parties consent, according to the JCT's report. The House Ways and Means Committee is scheduled to discuss the bill at 10 a.m. Eastern.
H.R. 5349, the Tax Court Improvement Act, introduced Monday by Rep. Nathaniel Moran, R-Texas, also would grant the court's special trial judges the power to hear any proceeding within its jurisdiction if the parties consent, according to the JCT's report. The House Ways and Means Committee is scheduled to discuss the bill at 10 a.m. Eastern.
IRS
Trump-Era IRS Strategic Operating Plan to Come by Summer 2026 – Erin Slowey, Bloomberg ($):
President Donald Trump’s IRS plans to release its strategic operating plan by the summer of 2026, replacing a blueprint developed during former President Joe Biden’s administration, officials told the Government Accountability Office.
The new IRS strategic plan for fiscal years 2026 to 2030 will better align with the Trump administration’s priorities, officials told GAO in a Tuesday report. The Treasury Department will also release its own plan by February 2026.
The new IRS strategic plan for fiscal years 2026 to 2030 will better align with the Trump administration’s priorities, officials told GAO in a Tuesday report. The Treasury Department will also release its own plan by February 2026.
Healthcare
Obamacare Premium Spike Warning Drives Democrats’ Extension Push – Erin Durkin, Bloomberg ($):
Democrats are prodding Republicans to support extending enhanced Obamacare tax credits by the end-of-the-month deadline to avoid the prospect of premium spikes that could drive enrollees to drop coverage.
Senate Minority Leader Chuck Schumer (D-N.Y.) said there’s pressure to extend the tax credits by October because enrollees will receive notices about their premiums, which are anticipated to rise without renewal.
Senate Minority Leader Chuck Schumer (D-N.Y.) said there’s pressure to extend the tax credits by October because enrollees will receive notices about their premiums, which are anticipated to rise without renewal.
Greenhouse Gas
EPA Ending Greenhouse Gas Reporting Blinds Companies, Agencies – Jennifer Hijazi, Bloomberg ($):
The Environmental Protection Agency plans to nix a program requiring large emitters to report their greenhouse gas output, which attorneys and clean air advocates see as a leap backwards in US climate efforts and a potential disadvantage for companies.
The decades-old Greenhouse Gas Reporting Program mandates emissions reporting from more than 40 categories of industry, and it’s at risk of elimination in the EPA’s Sept. 12 proposal that touts $2.4 billion in industry savings.
The decades-old Greenhouse Gas Reporting Program mandates emissions reporting from more than 40 categories of industry, and it’s at risk of elimination in the EPA’s Sept. 12 proposal that touts $2.4 billion in industry savings.
Research Credit
Tax Lawyers Urge IRS to Rethink Research Credit Form – Mary Katherine Browne, Tax Notes ($):
The IRS should postpone implementation of the recently revised form for claiming research credits and provide more effective guidance for reviewing and substantiating claims, according to the American Bar Association Section of Taxation.
“We support the Service’s effort to enhance administration of the Research Credit; however, we question whether the content of the Revised Form 6765 and the Revised Instructions will assist in achieving these stated goals,” the ABA tax section said in a September 15 letter to Treasury.
“We support the Service’s effort to enhance administration of the Research Credit; however, we question whether the content of the Revised Form 6765 and the Revised Instructions will assist in achieving these stated goals,” the ABA tax section said in a September 15 letter to Treasury.
Digital Tax
GOP Taxwriters Urge Trump to Pressure U.K. on Digital Tax – Stephanie Soong, Tax Notes ($):
President Trump should get the United Kingdom to pledge to withdraw its digital services tax or reopen a section 301 investigation into the tax in the absence of such a promise, Republican lawmakers said.
In a September 15 letter to Trump ahead of his second state visit to the United Kingdom, several Republican House Ways and Means Committee members, including Ron Estes, R-Kan., pushed for Trump to “prioritize securing a commitment that the U.K. will remove its DST.” Trump is set to meet U.K. Prime Minister Keir Starmer September 18.
In a September 15 letter to Trump ahead of his second state visit to the United Kingdom, several Republican House Ways and Means Committee members, including Ron Estes, R-Kan., pushed for Trump to “prioritize securing a commitment that the U.K. will remove its DST.” Trump is set to meet U.K. Prime Minister Keir Starmer September 18.
Trump Urged to Prevail on UK to Drop Its Digital Services Tax – Bloomberg ($):
More than 20 House Republicans urged President Donald Trump to secure a commitment from the UK to drop its tax on tech companies during his trip to the country.
Trump should push the UK to revoke its digital services tax “as soon as possible,” or follow through with imposing additional tariffs if the country doesn’t agree, the lawmakers, led by Rep. Ron Estes (R-Kan.) and Ways and Means Tax Subcommittee Chair Rep. Mike Kelly (R-Pa.), said in a letter to the president Monday.
Trump should push the UK to revoke its digital services tax “as soon as possible,” or follow through with imposing additional tariffs if the country doesn’t agree, the lawmakers, led by Rep. Ron Estes (R-Kan.) and Ways and Means Tax Subcommittee Chair Rep. Mike Kelly (R-Pa.), said in a letter to the president Monday.
Electric Trucks
Carmakers Bet on Cheap Electric Trucks to Offset Tax-Credit End – Kyle Stock, Bloomberg ($). “With President Donald Trump’s tax bill killing EV incentives at the end of the month, the push for a sub-$30,000 vehicle that runs on electrons may help buttress the projected dip in sales.”
Superfund Excise Tax
IRS Adds 39 Items to Taxable Chemical Substances – Asha Glover, Law 360 ($):
The Internal Revenue Service added 39 chemical substances to its list of those subject to Superfund excise taxes assessed to importers, the agency said Tuesday.
In a notice of determinations, the agency listed the additions and said they would be taxable under Internal Revenue Code Section 4671 starting in 2026. The additions were made in response to petitions by importers and exporters, including Arlanxeo USA LLC and Arlanxeo Canada Inc., Michelin North America Inc. and ExxonMobil Corp.
In a notice of determinations, the agency listed the additions and said they would be taxable under Internal Revenue Code Section 4671 starting in 2026. The additions were made in response to petitions by importers and exporters, including Arlanxeo USA LLC and Arlanxeo Canada Inc., Michelin North America Inc. and ExxonMobil Corp.
In the Courts
Hyatt Meets Friendly Court in IRS Lawsuit Over Rewards Program – Tristan Navera, Bloomberg ($):
The Seventh Circuit scrutinized the IRS’ case that payments Hyatt Hotels Corp. made to subsidiaries should be included in its income, given prior case law.
In oral arguments Tuesday, the US Court of Appeals for the Seventh Circuit examined how the Illinois-based hotels chain controls the fund it uses as the backbone of its customer rewards program, which the IRS hopes to see treated as income. Judge Thomas L. Kirsch appeared ready to re-examine the US Tax Court’s 2023 decision in favor of the IRS because it was based on Hyatt’s perceived benefits from the fund, when it should have looked more closely at the terms of the agreement based on the US Supreme Court’s 1990 decision in Commissioner v. Indianapolis Power & Light Co., which ruled for the taxpayer based on the terms of its repayment obligations.
In oral arguments Tuesday, the US Court of Appeals for the Seventh Circuit examined how the Illinois-based hotels chain controls the fund it uses as the backbone of its customer rewards program, which the IRS hopes to see treated as income. Judge Thomas L. Kirsch appeared ready to re-examine the US Tax Court’s 2023 decision in favor of the IRS because it was based on Hyatt’s perceived benefits from the fund, when it should have looked more closely at the terms of the agreement based on the US Supreme Court’s 1990 decision in Commissioner v. Indianapolis Power & Light Co., which ruled for the taxpayer based on the terms of its repayment obligations.
$300M Hyatt Rewards Tax Ruling Criticized By 7th Circ. Judge – Lauraann Wood, Law 360 ($):
A Seventh Circuit judge took issue Tuesday with a U.S. Tax Court's finding that Hyatt should report $300 million in rewards program fund revenue, saying the decision seemed to focus on a factor that was shot down by decades-old legal precedent.
The way Hyatt handles the reward fund seems to be "a very simple proposition," in which hotel owners deposit part of an individual's full money payment to serve as a source of reimbursement when someone else redeems rewards points to pay for a stay, U.S. Circuit Judge Thomas Kirsch said during oral argument over the hotel's appeal.
The way Hyatt handles the reward fund seems to be "a very simple proposition," in which hotel owners deposit part of an individual's full money payment to serve as a source of reimbursement when someone else redeems rewards points to pay for a stay, U.S. Circuit Judge Thomas Kirsch said during oral argument over the hotel's appeal.
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