Compared to last week, it was quiet on the hill this week. Let's take a look.
Lately on the Hill
- Republican House tax package released. House Republicans approved the Energy and Water Development and Related Agencies bill, which provides $57.958 billion in discretionary spending, $1.963 billion below President Joe Biden’s fiscal year 2024 budget request. According to the document, the bill prioritizes funding for agencies and programs that bolster our national security, energy security, and economic competitiveness.
- New bill introduced. The only tax-related bill introduced this week in Congress was:
- Sens. Ben Cardin (D-MD) and John Barrasso (R-WY) introduced the Taxpayer Privacy and Notification Act to give additional protection to taxpayers by providing more transparency from the IRS when contacting third parties, such as banks or employers. The bipartisan bill requires the IRS to disclose to taxpayers what specific information they are seeking from third parties and allows the taxpayer 45 days to provide that information directly to the IRS themselves.
IN CASE YOU MISSED IT
Related to the Inflation Reduction Act (IRA) and CHIPS Act
- The IRS issued Notice 2023-13191, Credit for Renewable Electricity Production and Publication of Inflation Adjustment Factor and Reference Price for Calendar Year 2023. The 2023 inflation adjustment factor and reference price are used in determining the credit amount available under the Section 45 production tax credit. The Notice also references information regarding the Domestic Content Bonus Credit under Notice 2023-38.
- The IRS has published proposed regulations to implement the advanced manufacturing investment credit established to encourage the manufacture of semiconductors and semiconductor manufacturing equipment in the United States. A public hearing has been scheduled for July 26, 2023, and all topic outlines are due by July 7, 2023.
- The IRS has published proposed regulations regarding the corporate bond yield curve for determining present value. The 60-day comment period ends on August 22, 2023, and a public hearing has been scheduled for August 30, 2023. According to the IRS, the proposed regulations specify methods required for constructing the corporate bond yield curve used to derive the interest rates used in calculating present value and making other calculations under a defined benefit plan, as well as for discounting unpaid losses and estimated salvage recoverable of insurance companies. These regulations are of interest to participants in certain retirement plans, as well as insurance companies.
- On June 14, 2023, the IRS released proposed regulations, temporary regulations, and FAQs to address questions regarding the elective payment election and transfer of credits under the IRA and the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS Act). Authors Will Ridenour and Iris Laws take a closer look in FORVIS’ recently published FORsights™ article, "New IRS Elective Pay & Transferability Guidance."
- The Senate approved the resolution of ratification of a “historic” and decade-long tax treaty between the U.S. and Chile. Technically, the Senate doesn’t ratify treaties. Instead, it takes up a “resolution of ratification”—which requires a two-thirds vote of approval—to allow the president to proceed with ratification. The U.S.-Chile treaty was originally signed in February 2010 and has been pending the ratification process until now.
- The IRS issued Notice 2023-37, which modifies prior guidance regarding benefits relating to testing for and treatment of COVID-19 that can be provided by a health plan that otherwise satisfies the requirements to be a high-deductible health plan. Specifically, this notice provides that the relief described in Notice 2020-15 applies only with respect to plan years ending on or before December 31, 2024.
- Heavy Highway Use Tax – Form 2290 for Tax Year 2023 Assurance Testing System is now available on the IRS website. For more information, see Publication 5078.
- The Taxpayer Advocate Service (TAS) has released its mid-year report to Congress. While the TAS report is complimentary to the IRS over a generally improved tax-return filing season, TAS urges the IRS to prioritize technological upgrades and set forth key objectives of the Office of the Taxpayer Advocate for the upcoming fiscal year. The report addresses the IRS’ Strategic Operating Plan to utilize funding the agency received under the IRA. Of the roughly $79 billion in IRA funding the IRS received, only $3.2 billion was allocated for taxpayer services and only $4.8 billion was allocated for business systems modernization (BSM). The Fiscal Responsibility Act of 2023 and a related side agreement have reduced the IRA funding level to about $58 billion. According to the report, TAS will continue to advocate for adequate funding for taxpayer services, BSM, and the operational overhead that supports those programs.
As a reminder, From the Hill will not run next week, as Congress takes a recess for the Fourth of July holiday.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.