Taxation & Representation: Navigating the Final Biden Treasury/IRS Guidance

Navigating the Final Biden Treasury/IRS Guidance

Over the last week, the Treasury Department and Internal Revenue Service released numerous regulations and other guidance spanning multiple aspects of the tax universe. Click here to view the table listing the released regulations and guidance and where to find them in today’s issue of Taxation and Representation.

Reconciliation State of Play: Debate Continues on Bill Strategy and Payfors: Despite House Speaker Mike Johnson’s (R-LA) intention to reach a final decision by Jan. 9 on how congressional Republicans would proceed with the budget reconciliation process, the House and Senate Republican Conferences remain divided on whether to pursue one, two or even three reconciliation bills for border, immigration, energy and tax issues, all top priorities for President-elect Donald Trump and his incoming administration. While initially signaling a preference for one bill, Trump has more recently remained open on the final strategy, stressing that it doesn’t matter how many bills congressional leaders pass because “the end result is going to be the same.”

11 Senate Democrats Urge Republican Colleagues to Pursue Bipartisanship in TCJA Negotiations: Led by Sens. Catherine Cortez Masto (D-NV) and Mark Warner (D-VA), 11 Senate Democrats wrote a letter to Senate Majority Leader John Thune (R-SD) and Senate Finance Committee Chairman Mike Crapo (R-ID) urging them and the Senate Republican Conference to work with Democrats in navigating the renewal of the expiring tax provisions in the Tax Cuts and Jobs Act (TCJA, Pub. L. 115-97). The lawmakers note the difficulties in passing a tax bill, given the budgetary consequences of passing a clean TCJA extension, and warn against passing “a fully deficit-financed, partisan” bill that “could risk raising costs for families, driving up interest rates for Americans looking to purchase a home, and increasing borrowing costs for American businesses and consumers.” The senators urge bipartisan tax reforms, given some aligned priorities between some Democrats and Republicans to “reduce deficit concerns … promot[e] pro-family tax policy, … [and] ensure the permanence of a competitive tax code for American businesses.”

Trump Meets with SALT Caucus Republicans: Last weekend, President-elect Donald Trump held meetings at Mar-a-Lago with several groups of Republicans, including House Republicans representing districts in the high-tax states of California, New York and New Jersey who are concerned about the cap on the state and local tax (SALT) deduction. Trump was reportedly receptive to the members’ requests for SALT reform, telling them to negotiate a “fair number” with other congressional Republicans. Negotiations are expected to be comprehensive, given the opposition to SALT reform by many Senate and House Republicans.

Treasury Department, IRS Issue Final Regulations on Sections 45Y and 48E Technology-Neutral Tax Credits: On Jan. 7, the Treasury Department and Internal Revenue Service (IRS) issued final regulations for the Section 45Y Clean Electricity Production Credit and the Section 48E Clean Electricity Investment Credit, both of which were enacted as part of the Inflation Reduction Act (Pub. L. 117-169). The final regulations remain largely the same as last year’s proposed regulations, with only modest changes to the requirement that energy facilities placed in service after Dec. 31, 2024, must have zero greenhouse gas emissions in order to qualify for the credit. The regulation differentiates between two types of energy facilities: (1) combustion and gasification (C&G) facilities; and (2) non-combustion and gasification (non-C&G), which the regulations apply to many of the current technologies, including wind, solar, hydropower, geothermal and nuclear. These two categories have different methodologies for determining their emissions. While combustion and gasification facilities must account for anticipated net lifecycle greenhouse gas emissions, including the full scope of fuel and feedstock production as well as any indirect emissions, the regulations provide that non-C&G facilities are required to take into account only emissions resulting from the production of electricity.

#incometax #taxseason #federaltaxpolicy #taxation #EstateTax #Deathtax #wealthtax #taxLegislation #CongressionalCaucus #CapitalGainsTax #incometaxrates #incometaxseason #taxrefund #taxreturn #incometaxreturn #gifttax #Generationskippingtax #InheritanceTax #repealestatetax #FamilyBusiness #promotefamilybusinesses #familyowned #supportlocalbusiness #womeninbusiness #AdvocatingForFamilyBusinesses #Generationallyowned #Multigenerationalbusiness  @FamilyEnterpriseUSA @PolicyAndTaxationGroup @DitchTheEstateTax #FamilyEnterpriseUSA #PolicyAndTaxationGroup #DitchTheEstateTax