Biden is open to cutting the IRS to secure a debt deal

The Biden administration is open to reducing IRS budget growth. News is coming The Washington Post, as Congress nears a potential June 1 default date without a deal to seal the debt. According to the Post, the proposal could allow up to $10 billion of the $80 billion the agency was authorized by the Inflation Reduction Act.

A taxpayer in Minnesota wins a Supreme Court case over his home equity. The U.S. Supreme Court ruled this week that Hennepin County could not use a property owner’s tax debt to foreclose on the property when it is sold. Hennepin County sold Geraldine Tyler’s home for more than she owed and refused to return the excess proceeds from the sale. In the ruling, Chief Justice Roberts wrote that “a taxpayer who loses his home to the state to satisfy a $15,000 tax debt has contributed far more to the public purse than he owed. The taxpayer must render to Caesar what is Caesar’s, but no more.”

Oklahoma lawmakers’ budget proposal lacks some tax cuts. State lawmakers released a $12.9 billion budget without the tax cuts that Gov. Kevin Stitt had requested. The governor wanted to cut the personal income tax by 0.25 percent and eliminate the 4.5 percent tax on food sales, which would cost $370 million annually. The proposed budget includes some tax cuts. It would repeal Oklahoma’s franchise tax and eliminate the marriage penalty for couples filing jointly, reducing annual tax revenues by $70 million.

Preparing for the next tax policy debate in the House… Bloomberg Tax (paywall) reports that the House Ways & Means Committee plans to release an economic package in early June, assuming the debt limit crisis is resolved. The package would reverse recent changes to the tax treatment of research and development deductions and restore bonus depreciation for most capital investments. Remove a more restrictive cap on the interest expense deduction. The changes were planned as part of the Tax Cuts and Jobs Act of 2017 to address the impact of the law’s deficit at the time of enactment on budget reconciliation rules used to bypass the Senate filibuster. Changes to the R&D deduction could garner bipartisan support, but congressional Democrats and the president insist the 2021 expanded child tax credit must also be restored in some form before agreeing to favorable business tax changes.

Belgium to stop sharing financial data of ‘random Americans’ Belgium’s data protection authority said this week that the transfer of information requested under the US Foreign Accounts Tax Compliance Act (FATCA) is “illegal”. FATCA requires that foreign financial institutions must turn over financial account information of their customers who are identified as US citizens to their home country’s authorities. This includes customers who are “casual Americans” – born in the United States but with no other US connection.

The daily deduction will be published on Tuesday, May 30, in observance of Memorial Day.

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