Tax Impacts

In a memorandum released on August 18, 2023 (CCM 202333001), the IRS Office of Chief Counsel clarified the eligibility of federal credit unions to claim Employee Retention Credits under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Internal Revenue Code.

The IRS outlined seven initiatives it seeks to accomplish in furtherance of its goal outlined within Objective Three.

On November 11, 2022, FTX filed for Chapter 11 bankruptcy protection along with over 102 other FTX-affiliated entities. The company operated as a digital asset exchange, with several subsidiaries and affiliates, which included Alameda Research, a related cryptocurrency hedge fund. The bankruptcy of the entire operational enterprise and digital asset hedge fund has been a seismic event in the digital asset community, affecting over one million customers and eliciting attention from numerous governmental and banking organizations, including the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), which recently issued a joint statement calling attention to certain potential risks associated with digital assets and digital asset sector participants. Notably, the SEC and CFTC are also investigating FTX and analyzing acceptable regulatory framework for the industry.

Today, President Biden signed into law the Inflation Reduction Act of 2022 (the “Act”). The Act ushers in, among other things, significant changes to the Internal Revenue Code and provides additional resources for the IRS.

The Senate has passed the Inflation Reduction Act of 2022 (“Act”), sending the bill to the House, where lawmakers are expected to take up the bill later this week.

The Act’s passage follows a busy weekend on the Hill, which included lawmakers forging ahead with the comprehensive reconciliation bill with formal debate and the Senate voting Sunday 51 to 50 to pass the reconciliation bill, with Vice President Kamala Harris casting the tie-breaking vote.

Yesterday afternoon, Senator Joe Manchin (D-WV) and Senate Majority Leader Charles E. Schumer (D-NY) announced a last-minute deal—the Inflation Reduction Act of 2022—containing significant changes to federal tax policy and IRS administration.

On July 27, 2022, Senator Joe Manchin (D-WV) and Senate Majority Leader Chuck Schumer (D-NY) announced that they have reached an agreement on a reconciliation package that stems from negotiations on the Build Back Better Act. H.R. 5376, or the Inflation Reduction Act of 2022, would, among other things: (1) establish a 15% corporate minimum tax; (2) provide for increased Internal Revenue Service (“IRS”) enforcement; and (3) modify the carried interest rules to apply short-term capital gains rates.

In response to TIGTA’s final report, issued on February 7, 2022, the IRS has agreed to issue notices to potentially noncompliant opportunity zone (OZ) funds and investors. 

Questions of what the Biden administration will mean for taxes are starting to be answered. In less than four months of taking office, the Biden White House has released four separate tax proposals – the American Rescue Plan, the American Jobs Plan, the Made in America Tax Plan, and, most recently, the American Families Plan.

On September 13, 2021, the House Ways and Means Committee unveiled a government-funding proposal involving a series of tax hikes and reforms.

The wait is finally over: The Internal Revenue Service Large Business and International (LB&I) Division will start implementing the Large Partnership Compliance (LPC) Program within the next two weeks.

Winston & Strawn’s Tax Planning and Controversy practices are pleased to announce the launch of our new series, Tax Impacts.