Daily Tax Report ®

Supreme Court Won’t Review Challenge to Mailbox Rule

EV Industry Fears Build as Congress Spars Over Tax Perk

Top Stories

Supreme Court Allows State Double Tax on Foreign Income

The Supreme Court won’t hear a constitutional challenge to Utah’s tax on an individual’s income that’s both earned and taxed abroad.

Ten-Mile Move, $25 Million in Tax Breaks: A Cleveland Story

Residents of Elyria brought an all-out blitz to keep Bendix Commercial Vehicle Systems LLC from leaving town, but in the end, abundant tax incentives, and easier access to Cleveland’s young professionals, spoke louder.

HILL TAX BRIEFING: Major Hurdles Remain for EV Tax-Perk

Read more: A new Taxpayer Advocate will start soon. IRS rules clarify that companies can deduct 50% of meal costs while entertaining clients. A bill aimed at abusive conservation easements needs more work.

Soak-the-Rich Tax Plans Take Hold in the Democratic Field

Senators Bernie Sanders and Elizabeth Warren would bring one of the most progressive tax agendas in history to the White House if either of them were to become president. So would every other Democrat vying for the presidency.

Sanders Unveils $1.5 Trillion Plan for Free Universal Child Care

Bernie Sanders on Monday unveiled a $1.5 trillion proposal for free universal child care and pre-kindergarten programs that would be funded through a tax on “extreme wealth.”

Mnuchin Says Congress Key Hurdle to Europe’s Digital Tax Demands

European finance chiefs arrived at a meeting of their global peers in Riyadh demanding the urgent creation of a new global tax system for the 21st century that would capture the profits of tech multinationals. U.S. Treasury Secretary Steven Mnuchin responded: it’s not that simple.

IRS Spells Out When Business Meals Qualify for Tax Deduction

The IRS released proposed rules in response to the 2017 tax law’s limit of a tax break for business meals and entertainment expenses.

Conservation Deduction Bill Needs Work to Stop ‘Bad Behavior’

A bill to curb tax-advantaged land transactions needs some more work before Congress can pass it, said Andrew Grossman, the chief tax counsel for Ways and Means Democrats.

Mboweni Budget Unlikely to Stop South Africa’s March to Junk

South African Finance Minister Tito Mboweni’s budget this week is unlikely to convince Moody’s Investors Service that he has a credible plan to rein in government debt.

U.S.-France Digital Tax Truce

The U.S. and France have agreed to a truce in their dispute over digital taxes, according to a French diplomat. It means punitive tariffs won’t be imposed by either side for the rest of this year. Bloomberg’s Caroline Connan reports on “Bloomberg Markets: European Open.”

Up Next:

France Favors International Solution to Tech Tax, Minister Cédric O Says

Sen. Warren on Wealth Tax, Trade War and Medicare For All

Why Billionaire Presidential Candidate Tom Steyer Supports the Wealth Tax

Why Warren’s Wealth Tax Could Push Billionaires Into Private Equity

N.J. Governor Murphy Says Trump 'Weaponized' Tax Law

Trump Weighs Weakening Obama's Corporate Inversion Rule

New York City Has a Property Tax Problem

Podcasts:

Nobelist Romer Wants to Target Tech Giants With Taxes

Tax Relief Leads Governors’ 2020 Agendas (Radio)

Tax Developments

IRS Form: Final Instructions to Form 8978 on Partner Audit Liability (IRC §6226)

Final instructions to Form 8978, Partner’s Additional Reporting Year Tax, released February 21 to reflect changes to the audit procedures of partnerships under the 2015 BBA. The form is used to compute additional reporting year tax, penalties and interest. Tax code Section 6226 allows a partnership to elect to push responsibility for payment down to the reviewed year partners. Instead of paying the imputed underpayment determined under Section 6221, a partnership may elect to have each reviewed year partner take into account the partner’s share of the adjustments, as finally determined. [Instructions to IRS Form 8978 (Including Schedule A) (Dec. 2019)]

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Case: Properly Signed and Filed Returns Required for Refund Jurisdiction (Fed. Cl.) (IRC §6402)

Signing claims for a refund under penalties of perjury or designating signing authority to another through a valid power of attorney is a jurisdictional requirement, the Court of Federal Claims held in granting the government’s motion to dismiss. Taxpayer, an Australian national residing in the United States, claimed he was entitled to foreign tax credits on taxes paid to Australia by an Australian corporation in which he has an interest. Taxpayer signed both his 2013 and 2014 returns under penalties of perjury. Taxpayer’s attempt to create a power of attorney failed because the Form 2848 was not signed nor were the correct boxes checked for someone to file a return on Taxpayer’s behalf. Taxpayer’s representative filed amended tax returns but only his and not Taxpayer’s signature appeared on the returns nor was an effective power of attorney form submitted. Without the proper signatures, the court held that Taxpayer failed to follow Treasury Regulation Section 301.6402-2(e), which the court held to be a valid regulation. The court also determined that a late filed power of attorney could not correct the original filing error. [Dixon v. United States, No. 19-270T (Fed. Cl. Feb. 21, 2020)]

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Case: Fraud Not Required to Be Proved to Hold Tax Debt Nondischargeable (Bankr. E.D. Mich.)

Bankruptcy Code Section 523(a)(1)(C) does not require a showing of fraud to make a tax debt nondischargeable but only a finding that a debtor has willfully attempted in any manner to evade or defeat a tax, a bankruptcy court held in releasing an updated opinion to correct a typographical error but without substantial change from the original February 12, 2020 opinion. By her voluntary, conscious and intentional choices to pay enormous amounts of non-discretionary expenses — all the while knowing she was not paying her taxes — and by arranging to sell a business to try to end run the IRS, Debtor willfully attempted to evade and defeat payment of her tax debt to the IRS, the court determined. [United States v. Harold (In re Harold), No. 16-40659 (Bankr. E.D. Mich. Feb. 19, 2020)]

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