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Biden Signs Two-Step Continuing Resolution into 2024. On Nov. 15, Congress staved off a government shutdown by passing a “laddered” continuing resolution (CR) with strong bipartisan support—the House passed the measure in a 336-95 vote and the Senate passed it in an 87-11 vote. Speaker Mike Johnson (R-LA) and GOP leadership’s “laddered” Continuing Resolution (CR) creates different funding deadlines for the 12 fiscal year (FY) 2024 bills. The measure provides a Jan. 19 deadline for four bills (Agriculture-FDA, Energy and Water, Military Construction-VA, and Transportation-HUD) and a Feb. 2 deadline for eight bills (Commerce-Justice-Science, Defense, Financial Services-General Government, Homeland Security, Interior-Environment, Labor-HHS-Education, Legislative Branch, and State and Foreign Operations). Speaker Johnson ruled out an additional clean stopgap funding bill for the next round of funding, setting up the possibility for a partial government shutdown in late January or a full shutdown in early February. Additionally, the Fiscal Responsibility Act (P.L. 118-5) provides that 1% budget cuts would be triggered in January if Congress does not pass all 12 full-year funding measures, but the across-the-board funding cuts would not impact agencies until April 30. Members of Congress are currently debating whether a year-long CR lasting until September 2024 would trigger the cuts, as the law states that cuts would take place if the government is operating under a short-term CR for “part of” the fiscal year. Democrats argue that a stopgap until September would count as a full year, allowing for no cuts to funding, while Republicans say that a CR until September would trigger the cuts.
Senate Democrats Introduce Carried Interest Bill. On Nov. 15, Senate Finance Committee Chair Ron Wyden (D-OR) and Sens. Sheldon Whitehouse (D-RI) and Angus King (I-ME) introduced the Ending the Carried Interest Loophole Act (S. 3317), which would end the tax break on carried interest that they said disproportionately benefits wealthy Americans. The bill would prevent the recharacterization of compensation earned by hedge fund managers and requires them to recognize their annual compensation, which would be taxed at ordinary income rates. Other Senate Democrats that co-sponsored the bill were Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Brian Schatz (D-HI), Jack Reed (D-RI), John Fetterman (D-PA), Ed Markey (D-MA), and Mazie Hirono (D-HI). The bill text was released alongside a press release, along with a summary and one-pager of the bill.
UN Proceeds with New Global Tax Reform Plan; Treasury Pushes for Delay in Pillar One Deadline. With the support of 125 countries, the United Nations voted on Nov. 22 to establish a working group on international tax rules. The new working group will be a direct challenge to the yearslong effort by the Organisation for Economic Cooperation and Development (OECD) to implement a global tax regime. The UN effort met with opposition from 48 countries, including the United States and the EU countries that have championed the OECD effort. Developing countries have led the campaign for an alternative to the OECD’s two-pillar approach based on concerns that the framework would only benefit developed nations.
IRS Announces Another Delay in Form 1099-K Reporting Threshold for 2023. On Nov. 21, the Internal Revenue Service (IRS) released Notice 2023-74 announcing a delay of the $600 Form 1099-K reporting threshold for third-party settlement organizations for calendar year 2023.
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