The recent presidential debate centered largely around the 2017 Tax Cuts and Jobs Act, with candidates disagreeing on its impact on taxpayers. Wealth transfer taxes and post-mortem basis adjustment rules were also discussed, highlighting a key difference between the candidates. The winner of the upcoming election will face significant financial challenges, with the Congressional Budget Office projecting a growing deficit and federal debt that could exceed $50 trillion by 2034.
Elections are not just happening in the U.S., as Time magazine has dubbed 2024 as the “ultimate election year” due to the number of countries holding elections. Tax policy is a key issue in many of these elections. On the tax front, the IRS has been busy issuing guidance, including final regulations on reporting requirements for brokers of digital assets under the Infrastructure Investment and Jobs Act. The agency also clarified exceptions to the early withdrawal penalty under the SECURE 2.0 Act.
In a surprising move, the IRS issued a public apology as part of a settlement with billionaire Kenneth C. Griffin in the Littlejohn leaker suit. The agency also welcomed Guy Ficco as the new chief of IRS Criminal Investigation earlier this year. Tax professionals and self-described “experts” offering poor advice were called out on social media, highlighting the importance of accurate tax information. The Supreme Court’s recent ruling in Loper Bright Enterprises v. Raimondo could have implications for tax law by limiting the powers of federal agencies.
The Earned Income Tax Credit (EITC) was discussed as a refundable tax credit for working individuals with low to moderate income. The requirements for claiming the EITC were outlined, including the need for earned income and certain eligibility criteria for individuals and qualifying children. The newsletter also addressed changes in the tax code that staff and contributors would like to see, ranging from student loan deductions to the expansion of the Child Tax Credit.
As tax deadlines approach, the IRS is ramping up audits of large partnerships and pass-through entities, which play a significant role in the tax landscape. The agency is also addressing discrepancies in partnership returns involving significant assets. Tax conferences and events are scheduled for professionals in the field to stay updated on current tax issues. Overall, tax policy remains a key topic in various elections around the world, with new guidance and regulations shaping the tax landscape.