Trump 2.0: Tax Cuts and Tariffs
What might a second Trump Administration do for taxes? Former President Trump and his advisers are discussing deeper cuts to individual and corporate tax rates as a follow-up to the 2017 Tax Cuts and Jobs Act, reports The Washington Post. The corporate rate, for example, might be cut to as low as 15 percent. Trump’s team has suggested paying for the cuts with a 10 percent tariff on all imports to the US.
Businesses still can’t deduct R&D costs immediately. The Wall Street Journal reports (paywall) that while Congressional Republicans and Democrats both want to reverse the TCJA provision requiring businesses to spread tax deductions for research costs over several years (instead of claiming the full deduction immediately), they haven’t taken action yet. That’s leaving start-ups with some serious tax bills. Under current law, one particular company that expected to report a $90,000 loss ended up reporting a $1 million profit.
GAO: The IRS needs to fix data security flaws. The Government Accountability Office (GAO) in a new report finds that weaknesses in IRS data systems continue to pose a risk to taxpayer information. The weaknesses are related to training, information systems, contractor oversight, and information-sharing. The GAO makes 16 new recommendations for the IRS to follow, including one for Congress to consider. The matter for congressional consideration would provide the IRS with additional authority to inspect other agencies’ data safeguards before sharing information.
TIGTA: More improvements needed for fuel tax credit screening. The Treasury Inspector General for Tax Administration (TIGTA) finds that, despite improvements, the IRS still needs to improve its compliance processes for reviewing fuel tax credit submissions. As an example, TIGTA notes that of the 1,172,732 forms with FTC claims processed from 2018 to 2021, 263,522 returns had no business purpose.
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