House Democrats demand documents from 80+ Trump-affiliated individuals and institutions. The House Judiciary Committee opened a broad investigation into whether the Trump administration engaged in obstruction of justice, abuse of power, and corruption, including violations of the Constitution’s emoluments clause and campaign finance laws. Recipients of the demand have two weeks to respond or the committee will issue subpoenas. The panel is not asking for tax information. That can be requested only by the Ways & Means Committee.
Wait no more: Treasury drops new TCJA international tax regs. The Treasury and IRS have proposed the latest package of draft guidance to help multinational firms comply with provisions of the Tax Cuts and Jobs Act. They are aimed at determining the amount of the deduction for foreign-derived intangible income and global intangible low-taxed income, as well as coordinating the deduction for FDII and GILTI with the rest of the tax code.
How are American taxpayers feeling this season? The Wall Street Journal reports (paywall) that tax preparers are stockpiling tissues and chocolates for stressed clients—and for themselves. The Tax Cuts and Jobs Act changed the rules for many taxpayers who had grown comfortable with the old law. TPC estimated that about two-thirds of households will see tax cuts and about 6 percent will pay more under the 2017 law. But it seems taxpayers are fretting about more than their tax liability.
Victims of sexual harassment or abuse can deduct attorney fees. The IRS has clarified that section 162(q) does not preclude the recipient of a settlement from deducting attorney fees, even if the payment is subject to a nondisclosure agreement. Forbes contributor Robert Wood elaborates here. He explains that while the TCJA prohibits individuals and companies from writing off settlements they pay and related legal fees, that limitation does not apply to plaintiffs who receive the payments.
The Senate will reject Trump’s declaration of emergency—for now. Senate Majority Mitch McConnell has acknowledged the inevitable—a majority of the Republican-controlled Senate will vote next week to nullify the President’s emergency declaration aimed at getting more funding for a border wall. The House already has voted to do so. But Trump will veto the resolution and it is unlikely that Congress can override.
Illinois GOP lawmakers want details on Governor Pritzker’s income tax plan. The governor has not yet released a rate schedule for his proposed graduated income tax plan. Politicking has ensued, with Republicans claiming that it would hurt the middle class and Democrats saying most everybody would see a tax reduction. Pritzker promises details before the issue comes to a vote. The entire Republican House caucus has signed a non-binding resolution opposing Pritzker’s still-unspecified proposal.
How will Louisiana spend its new revenue? As much as $300 million in new general state tax revenue could hit state coffers next year. Education seems to be a high priority for Democratic Governor John Bel Edwards. But how will he divide the bigger pie among early childhood education, K-12 schools, and colleges?
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