Tax & Representation, June 22, 2022 | Brownstein Hyatt Farber Schreck

NOTE ON PROGRAMMING: Tax and Representation publishes Wednesday this week due to the June 16 holiday. The bulletin will not be published next week or the following week due to the two-week Congressional recess on Independence Day. Publication will resume on Tuesday, July 12.

Legislative legend

Rebuild better prospects. Congressional Democrats are still hoping to pass some version of the Build Back Better Act (BBBA), the fiscal reconciliation vehicle to advance some of President Joe Biden’s legislative policies, before the August recess. Due to Sen. Joe Manchin’s (D-WV) concerns about inflation and overspending by Congress, a revised package will include less spending and contain provisions for deficit reduction. Manchin continues to push for a two-to-one deficit reduction.

Talks between Senate Majority Leader Chuck Schumer (D-NY) and Manchin continued, with the duo meeting last week. According to reports, the two are looking into a potential deal in detail. Discussions have largely focused on health provisions, such as the extension of Affordable Care Act (ACA) subsidies and drug pricing, energy policy and payfors. On the energy policy front, an additional $4,500 tax credit for electric vehicles made with national union labor was a sticking point. Earlier today, Manchin said the provision was “out of order”.

President Biden has also been engaged in negotiations, recently meeting with Schumer and House Speaker Nancy Pelosi (D-CA) to reach a deal.

Schumer is setting the stage for potential action in the coming weeks. His team is meeting with the Senate parliamentarian to prepare for a vote in July or early August. That timeline is achievable, according to Senate Finance Committee Chairman Ron Wyden (D-OR), who was reportedly directly involved in the discussions. Wyden said last week that he “spends a lot of time every day on it” and thinks it can be “done before the August break”.

The White House is considering a plan to counter inflation. As inflation continues to climb, President Biden is working on legislation to provide relief to Americans. Over the weekend, National Economic Council Director Brian Deese said the president was considering a legislative package to help Americans fight inflationary pressure. According to Deese, the White House is “working very closely with congressional leaders, with Senate leaders on this ‘package’ and hopes ‘to see progress on this in the coming weeks.’

President Biden also announced his support for a suspension of the federal gasoline tax of 18.4 cents per gallon to relieve the pump. Wyden gave his backing to the idea, saying earlier this week “it should definitely be on the table.” However, it is unlikely to get the congressional support needed to become law, and several members of Congress, including Democrats, have already spoken out against the proposal.

Senate Finance Considers EARN Act. The Senate Finance Committee held aexecutive session Wednesday to review the Enhancing American Retirement Now (EARN) Act.

The EARN Act, introduced Friday by the committee chairman, would help Americans save by encouraging employees to enroll in retirement savings plans, among other measures. A full section of the legislation can be viewed here.

Wyden said the bill received input from ranking committee member Sen. Mike Crapo (R-ID) as well as senses. Rob Portman (R-OH) and Ben Cardin (D-MD), indicating the bill could receive bipartisan support. in committee. According toJoint Committee on Taxation, the EARN Act would generate $539 million in revenue. Then the EARN Act and other retirement security legislation that will pass through Congress will be compiled into one package.

In the Senate Committee on Health Education, Labor and Pensions (HELP), lawmakers are working on their own retirement agenda. Specifically, committee chair Patty Murray (D-WA) and ranking member Richard Burr (R-NC) coordinated a set.

The retirement security legislation is widely seen among congressional tax staffers as having bipartisan support, and a package is expected to be proposed by the end of this year. Some lawmakers, such as Sen. Chuck Grassley (R-IA), expect retirement security language to eventually be included in a year-end appropriations package.

Earlier this year, the House passed Securing a Strong Retirement (HR2954), also known as SECURE 2.0, which would promote retirement security by providing automatic enrollment of employees in certain plans and increasing the age at which participants are required. to begin receiving mandatory distributions, among other provisions.

1111 Constitution Avenue

The robots take control of the taxman. The Internal Revenue Service (IRS) has struggled with customer service over the phone in recent years. IRS Commissioner Charles Rettig, for example, recently told lawmakers that the agency can only answer about 20% of the calls it receives. IRS officials attribute much of this to poor resources, particularly a lack of staff to answer the phones.

The IRS is working on a solution: automated robots. In a Press release On Friday, Darren Guillot, IRS deputy commissioner for collection and operations support for small businesses and the self-employed, said robots are already in widespread use at the agency. Guillot said that “to date, voice robots have answered over 3 million calls. As we add more features for taxpayers to solve their problems, I anticipate many more taxpayers will get the service they need quickly and easily. Guillot also reported that the bots, which have a 40% satisfaction rate, saved about 20 minutes per call.

Rettig said the automated bots are “part of a larger effort by the IRS to help improve the taxpayer experience” and that the IRS “will continue to look for ways to better assist taxpayers, and that includes to help people avoid waiting on hold or having to make a second phone call to get what they need.” He added, “Extended voice robots are another example of how technology can help the IRS provide better service to taxpayers.”

Global getdown

House Republicans want changes at the FTC. Republicans on the House Ways and Means Committee, led by Ranking Member Kevin Brady (R-TX), have called on the Biden administration to make changes to the final foreign tax credit (FTC) regulations released in December 2021 to address growing US business concerns.

In a letter Last week, to Treasury Secretary Janet Yellen, the committee’s 18 Republicans said the final rule “contradicted” Congress’s intent that taxpayers could apply foreign tax credits to protect themselves against the double taxation. The signatories also claimed that the three days between the publication of the regulation and its effective date made it “impossible” to assess the new rules given the fundamental changes to the credibility requirements brought about by the new regulation.

The letter says the Treasury Department’s delay in clarifying the guidelines has placed an undue burden on taxpayers who want to comply. For that reason, Republicans have called on the administration to expedite the release of proposed rule changes and consider taxpayer feedback. To allow time for this process to complete, Republicans on the committee urged the Treasury Department to delay implementing the new regulations and enforce the January 1, 2023, effective date that applies to Puerto Rico’s Law 154 excise tax under final regulations currently.

Hungary leaves the EU in search of an agreement. Ahead of last week’s meeting of the European Union’s Economic and Financial Affairs Council, which oversees EU tax policy, France has persuaded Poland to drop its objections to the EU directive. EU aiming to bring the bloc into line with the 15% overall minimum tax under the Pillar Two agreement brokered by the Organization for Economic Co-operation and Development last year. While Poland’s acquiescence was to enable the unanimous vote required to pass the Pillar Two Directive, Hungary unexpectedly changed its position and vetoed the measure.

Discussing the “no” vote, Hungarian Foreign Minister Péter Szijjártó said last week: “Europe is in a difficult enough situation without the global minimum tax.” He later added that Hungary “does not support a tax hike for Hungarian companies, and we are not prepared to put jobs at risk”.

The Czech Republic will take over the six-month rotating presidency of the EU’s Council of Ministers in July, and the Pillar Two Directive could be discussed again at the July 12 Economic and Financial Affairs Council meeting. Failing that, it will meet again after the summer break on October 4.


In short

  • Malerba for the US Treasurer. President Biden has chosen Lynn Malerba to be the U.S. Treasurer, a post overseen by the U.S. Mint, Bureau of Engraving and Printing, and Fort Knox.
  • Look at Intuit. Senator Elizabeth Warren (D-MA) and Representatives Katie Porter (D-CA) and Brad Sherman (D-CA) sent a letter this week to Treasury Inspector General Rich Delmar, Treasury Inspector General for Tax Administration (TIGTA) Russell George and Federal Trade Commission Inspector General Andrew Katsaros calling for an investigation into “the abuse by Intuit of the revolving door”.

Brownstein Library

  • House Republicans want a brief UNAX. Republicans on the House Ways and Means Committee sent a letter last week to the IRS Commissioner and TIGTA to request a briefing on their ability to “track and refer to prosecution cases of willful unauthorized access to confidential federal taxpayer information (UNAX) and improper disclosure authorized confidential federal tax information by employees and contractors of the IRS, and outside parties.