New Year’s Predictions And Rejected Tax Credit Claims
No year-end tax deal after all? TaxNotes reports (paywall) on a tax planning webcast by Grant Thornton, which shared that December will not likely see an appropriations package. Congress is more likely to advance a tax package in 2024… Maybe. Senate Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Sen. Mike Crapo (R-ID) offered no updates on ongoing negotiations.
IRS rejects 20,000 ERC-related tax refund claims. The IRS is sending out letters to over 20,000 taxpayers rejecting their employee retention credit (ERC) claims. The IRS is rejecting filings from entities that didn’t exist or didn’t have paid employees during the eligibility period. The IRS has been grappling with a flood of questionable claims for the pandemic-era tax break, driven in part by aggressive marketing practices targeting small businesses.
The federal government will tax Minnesotans’ tax rebates. Rebates sent out to Minnesota taxpayers last fall will be taxed by the federal government when those recipients file their tax returns. Minnesota Revenue Commissioner told Minnesota Public Radio that 2.1 million rebate recipients would see their rebate checks subject to federal income tax, while the remaining 390,000 recipients would be unaffected, since they do not earn enough to owe federal income taxes.
Is everybody forming an LLC? TPC’s Tax Hound Renu Zaretsky examines the rise of Limited Liability Companies. LLCs have been growing as a share of all non-farm sole proprietorships since 2001, now accounting for nearly 10 percent of them. Should she join the nearly 2.78 million others who have established them? Not necessarily. The decision should be made carefully, given myriad requirements, regulations, and tax revenue implications.
When it comes to tax dollars and school choice, Texas will wait until spring. Gov. Greg Abbott (R) called multiple special legislative sessions this fall so that House Republican lawmakers could advance legislation to establish tax-dollar-funded vouchers for private schools. Texas lawmakers didn’t move forward with a proposal and the governor is now endorsing challengers to the House Republicans who opposed his efforts.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
