Trump Organization guilty of state tax fraud. A New York jury convicted the former president’s business of 15 counts of criminal tax fraud. The fraud involved paying top executives with luxury cars and apartments and failing to report those payments as taxable compensation for either income or payroll tax purposes. Trump was not charged though prosecutors asserted he was aware of the payments. The firm could owe up to $1.6 million in penalties.
The clock continues to tick toward a government shutdown. Senate Majority Leader Chuck Schumer says the Senate has “a lot of negotiating left to do” on a bill to fund the government through Sept. 30, 2023. Negotiators have not yet agreed on a top-line number for non-defense spending. Until they do, they can’t settle funding levels for individual agencies. Some observers feel lawmakers have only until the end of this week to agree to a spending framework or they’ll likely need a week-long continuing resolution as Congress approaches its Dec. 16 funding deadline. Of course, it is only Wednesday.
Paying government workers during shutdowns. The DC Court of Appeals ruled last week that federal employees who work without pay during a shutdown are not eligible for monetary damages because the Anti-deficiency Act prohibits the government from paying workers without appropriations. The federal employees still will get back pay for the last shutdown.
IRS tries again on easements. The Tax Court and the Sixth Circuit Court of Appeals tossed IRS guidance that designated some syndicated conservation easement deals as listed transactions, which would have required disclosure by participants and the syndicators. The courts ruled the agency failed to comply with administrative procedures that require notice and comment before it adopted the rule in 2016. Now, the agency is running a proposed rule through the proper administrative hoops.
Connecticut’s fiscal future brightens a bit. The state expects increased tax receipts will exceed anticipated expenses by $250 million in the 2023-24 fiscal year, which begins July 1, nonpartisan analysts said. Gov. Ned Lamont urged lawmakers to remain cautious, even though hundreds of millions of dollars earmarked for interest payments could soon become available annually for other spending priorities.
California lawmakers introduce a new profits tax on oil companies. The legislation would levy a penalty (or tax) on oil companies when their profits exceed a statutory threshold. The revenue would go into a new fund that would distribute payments to taxpayers. The bill does not yet specify the taxable threshold or eligibility for the payments. Democratic Gov. Gavin Newsom says those details will be settled during the special legislative session.
Hawaii Gov. Josh Green wants to end the state’s tax on food and medicine. The newly elected Democratic governor took his oath of office this week and vowed to get rid of regressive taxes. That includes Hawaii’s general excise tax. The tax, ranging from 4 percent to 4.5 percent depending on a county’s surcharge, covers food, medication, and other goods.
South Dakota Gov. Kristi Noem wants to repeal the state tax on groceries. The Republican just has to convince lawmakers that South Dakota can afford the $100 million-a-year plan. Legislators want to assure funding for teachers, healthcare workers, and other state employees as well as reduce property taxes. Noem says revenue growth can cover it all, but some Republicans in the legislature remain uncertain.
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