Politico: Get that money out the door
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— Get ready: The gears for getting out the $1,200-plus direct payments for coronavirus relief start grinding today.
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— Democrats are zeroing in on a provision in the most recent economic stimulus law that cuts taxes for pass-through businesses.
— Meantime, the Trump administration is floating the idea of expanding companies' ability to fully write off investments.
AND WEEK 4 OF WFH is almost in the books, and we gotta say: Some of these social distancing gibes are hitting close to home.
Well, that might have been quite a lucrative invention: Today marks 171 years since a New York inventor named Walter Hunt received a patent for what we now call the safety pin. (Hunt apparently thought up the idea to pay off an old debt, and then quickly sold the idea for $400 — or a bit above $13,000 in today's dollars.)
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MONEY IN THE BANK: Well not quite yet, but the Treasury Department is going to start transmitting those rebate payments into bank accounts today, as Pro Tax's Aaron Lorenzo reported.
That means people will see the money in their account next week, probably around Wednesday. Treasury is also expected to announce a new tool today that allows people who didn't file a tax return for 2018 or 2019 to provide personal information that will allow them to get a payment.
Next week is also when Treasury Secretary Steven Mnuchin has said that people will be able to upload their direct deposit information, in case the IRS doesn't already have it, in order to get their payment more quickly. (The Los Angeles Times had more on that on Thursday.)
At the same time, the IRS will start processing check payments early next week, but recipients won't actually start getting those until next month — and those checks will also take up to 20 weeks to be sent out in total, with around five million hitting mailboxes each week.
Treasury and the IRS have yet to confirm this timeline, but it's basically in line with what the Trump administration has been saying for weeks.
Related note: The IRS also pushed back several hundred tax deadlines to July 15, as Aaron also noted — helping out businesses, charities, estates and the like. And yet: There's still the sense that this might not be the last deadline delay the IRS has to offer. (Or at least that's what some folks are hoping.)
NOT A FAN OF THAT: It's no secret that Democrats weren't huge fans of some of the provisions in the CARES Act, H.R. 748 (116), that they believe are too generous to the business community.
And on Thursday, some prominent party leaders and lawmakers took aim at a few particular (and expensive) provisions. Former Vice President Joe Biden, now in line to take on President Donald Trump this fall, proposed to pay for a broad plan to forgive student loan debtby rolling back the parts of the law that allow pass-through businesses to carry back losses and suspend limits on owners using business losses to offset other income.
Rep. Lloyd Doggett (D-Texas) and Sen. Sheldon Whitehouse (D-R.I.), both tax writers, also drilled down on those changes, in addition to a provision that allows corporations to carry back losses to get refunds. The two Democrats pressed Vice President Mike Pence and Mnuchin about those provisions in a Thursday letter, asking for information to help the public "assess whether any individuals within the administration who stand to gain from these provisions were involved in their development." (The pass-through changes would help the real estate industry, among other sectors.)
Whitehouse also pressed Mnuchin on the issue on a recent conference call, according to CNN's Manu Raju, and called the inclusion of those changes "really scandalous" and an effort "to loot the American taxpayer."
But some tax experts on the right say the changes make perfect sense, even at a cost of close to $200 billion over a decade — the vast majority of which come from the pass-through side. In short, they argue that allowing companies to apply losses to years in the past or future helps smooth out volatility and allows businesses to be taxed on their actual income over a multiyear span.
On the left, critics say the most recent coronavirus response was too generous in allowing businesses and wealthy people to spread around their tax losses. But there's also this: The changes in the stimulus law also roll back some of the offsets that Republicans used in the 2017 tax overhaul to pay for items like the 20 percent deduction for pass-through income.
David Kamin, a New York University law professor, called that a "tails I win, heads I win" approach for businesses, describing the newest change on loss limits as "a tax cut layered on top of a tax cut — and not even entirely focused on firms experiencing losses."
Related note: The IRS released guidance on Thursday to flesh out how the net operating loss change will work, as Pro Tax's Brian Faler reported.
MAKE IT BIGGER! Larry Kudlow, the director of the National Economic Council, backed the idea of "100 percent immediate expensing," which would "literally pay the moving costs of American companies from China back to the U.S." in a Thursday interview with the Fox Business Network.
Of course, the U.S. went a good way toward full immediate expensing in recent years, through the 2017 tax law. But the Tax Cuts and Jobs Act did not allow for immediate write-offs of buildings and structures, even as it did for items like equipment and renovations through 2022, as Bloomberg noted.
As it happens, some groups on the right have been pushing to allow for full expensing for structures as part of the government's response to the virus outbreak. The National Taxpayers Union said in a letter last month that such a step would be good to support new investment — meaning it'd be more of a move to support an eventual economic recovery, instead of the current efforts to keep everything afloat.
DON'T FORGET THE OECD: Remember (like six weeks ago) when the talks over a global tax overhaul were going to be the slam dunk, no doubt tax story of 2020? Finance Minister Olaf Scholz of Germany wants to make sure the coronavirus outbreak doesn't completely sweep those negotiations out of the way, Reuters reports. Scholz said the current situation, where countries are going to face recessions and falling revenues, only reinforced the importance of the talks led by the Organization for Economic Cooperation and Development. Still, negotiators faced a complex task in reaching a deal in the best of circumstances, and an anonymous German official acknowledged to Reuters that all the uncertainty around where the global economy will stand in the months to come could easily put the OECD talks on hold. Germany was set to host a key OECD conference for the talks in early July, but that might need to be postponed.
A FOXCONN UPDATE: The tech company from Taiwan believes it hired enough people in 2019 to qualify for tax credits from Wisconsin, after falling short the year before, The Milwaukee Journal Sentinel reports. Foxconn struck a deal with the state worth potentially billions of dollars that was celebrated by Trump and a host of other Republicans. For 2019, the company needed to hire at least 520 full-time eligible workers to get close to $5 million in tax credits, and Foxconn says it brought on more than 550. That's still well short of the maximum amount of incentives the company could have gotten from the state — some $19 million, by hiring just over 2,000 employees. Another issue: Foxconn and Wisconsin have butted heads before about the agreement they struck, and what the company actually needs to do to get credits.
Coal companies would like to cut back on the tax they pay to support a black lung trust fund, because of the virus outbreak.
The Christie's auction house got a $16.7 million fine for not properly collecting New York sales tax.
It's property tax deadline day in California.