| | | | |  | | By Bernie Becker | | Presented by |  | | | LITTLE SNEAK PEAK: The IRS rolled out a draft form for cryptocurrency transactions on Friday, the latest step in its implementation of new reporting requirements for digital assets. The draft Form 1099-DA didn’t have a ton of surprises for those working in the virtual currency industry, particularly since the IRS had already made it pretty clear that it would take a broad view of what constituted a cryptocurrency broker. In a lot of ways, the tax form for digital assets also looks fairly similar to other 1099 forms, including the one for financial instruments. Crypto brokers currently are expected to have to start using the digital asset 1099 form for transactions made in 2025, after lawmakers passed more robust reporting requirements for the industry in the bipartisan 2021 infrastructure law. Treasury and the IRS are still in the process of finalizing the regulations for those requirements — and, as you might recall, Democrats like Sen. Elizabeth Warren of Massachusetts have been frustrated by what they see as a slow implementation of the new rules. So what kind of feedback is the new form getting from those inside the sector? It’s probably fair to say there are some weedy questions, as well as efforts to suss out more of the IRS’s broader approach to the virtual currency industry. For instance, Miles Fuller of TaxBit wrote that the way the IRS structured the form suggests that the agency is interested in “establishing some sort of common asset registry for digital assets.” On top of that, Jessalyn Dean of Ledgible noted the IRS would have to offer taxpayers more guidance on when crypto losses might not able to be written off — arguing that a proposed box dealing with non-deductible losses stemming from a “reportable change in control or capital structure" doesn’t give brokers nearly enough advice on what circumstances might qualify for that situation. WELCOME BACK to another edition of Weekly Tax, where your regular author is back and ready to pounce on the renewed cultural relevance (kinda) of “Dead Poets Society” to post this Saturday Night Live skit from the recent past. Speaking of SNL: Today marks 46 years since the Blues Brothers, Elwood and Jake, played by Dan Aykroyd and John Belushi, made their debut appearance — a couple years before they were 106 miles from Chicago. Got a red hot scoop? Send it our way. Email: bbecker@politico.com, bfaler@politico.com, bguggenheim@politico.com and teckert@politico.com. You can also reach us on X, formerly Twitter, at @berniebecker3, @Brian_Faler, @ben_guggenheim, @tobyeckert, @POLITICOPro and @Morning_Tax.
| | A message from Intuit — powering prosperity and financial health worldwide with TurboTax, Credit Karma, QuickBooks, and Mailchimp: Every tax season, families look for ways to maximize their deductions and credits. Two important credits in particular, the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) have been at the center of discussions from the kitchen table to the halls of Congress. More should be done to ensure all qualifying taxpayers can benefit from these credits. That starts by making it easier—learn more. | | | OUT TO THE STATES: States — not just red ones, but the blue ones, too — were in something of a tax-cutting frenzy the last several years, fueled in no small part by federal pandemic aid. But that all started to slow down during the 2024 state legislative sessions. Which isn’t to say that all was quiet on the tax front in state capitals these past few months. Republican-run states continued to push for new income tax cuts, accelerated income tax cuts and even the scrapping of state income taxes, with Georgia, Iowa and Utah all enacting further legislation in that area this year. Meantime, blue states both pushed for more targeted tax relief that’s been popular with Democrats on the federal level, too, like expanding or enacting refundable tax credits — and have started showing renewed interest in tax-the rich (and corporations) ideas that weren’t always as necessary during the flushest pandemic aid years, when federal aid was pouring in. One example: Maryland and other states showed interest in worldwide combined reporting, which seeks to put a crimp on corporate tax avoidance. Groups like the progressive Center on Budget and Policy Priorities applauded the push for worldwide combined reporting, as well as other proposals aimed at squeezing more revenues out of the wealthy and corporations and expanding or implementing earned income or child tax credits. Still, lots of the legislative efforts at boosting taxes on the rich fell short this year, which more conservative groups saw as a positive development. “The surge in proposals for wealth taxes, higher capital gains taxes, worldwide combined reporting, and other new and higher taxes have less to do with pressing revenue needs than ideological preferences,” said Jared Walczak of the right-leaning Tax Foundation. About those property taxes: Remember that old theory about how policies first tested in states and localities can bubble up to the federal level? Well, it’s also worth noting that perhaps the hottest tax topic in state capitals this year has been property taxes, an issue that might have less salience up in Washington. In Nebraska, Gov. Jim Pillen is likely to call for a special session after the legislature undercut his plan to trade a sales tax increase for a cut in local property taxes. A little to the west, the Wyoming Republican Party censured the state’s GOP governor, Mark Gordon, for vetoing a property tax relief measure. And Georgia voters will get a chance to weigh in on potential property tax cuts for themselves in a ballot measure this November. “Property tax relief is emerging as the most active and heavily contested tax policy issue, something that may play out this November but is likely to continue into 2025 and beyond,” Walczak said.
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| | Fortune: “Wealthy Norwegians flee to Switzerland to evade high wealth taxes, with their bankers following.” Reuters: “German finance minister rejects Brazil's proposal to tax super-rich.” Reuters, again: “India's income tax receipts up 17.7% yr/yr in 2023/24, near $235 bln.”
| | | | A message from Intuit — powering prosperity and financial health worldwide with TurboTax, Credit Karma, QuickBooks, and Mailchimp:   | | | | | From our team in Albany: “Tax breaks to hire local journalists approved in New York, a national first.” Minneapolis Star Tribune: “Minnesota House lawmakers push forward fertilizer tax to clean up contaminated wells.” Missouri Independent: “Missouri House narrowly sends private-school tax credit, charter expansion to governor’s desk.”
| | A message from Intuit — powering prosperity and financial health worldwide with TurboTax, Credit Karma, QuickBooks, and Mailchimp: An estimated 15-20% of eligible taxpayers do not claim the EITC, often because of how complex it is. Cindy, a TurboTax Customer Success Manager, told us, “One of the most vulnerable populations of taxpayers are those who rely on the CTC and the EITC—two extremely complicated tax credits to navigate. If someone improperly claims a child on their tax return, even by accident, the taxpayer is then required to print and mail the tax return, causing significant delays in processing.”
We don’t write the tax code—Congress does—but we believe the tax code should be more transparent, simple, and fair for all taxpayers. Learn more. | | | | | Bloomberg: “Biden Unveils Winners of $2 Billion in Green Tax Credits.” Tax Notes: “Gain and Little Pain From New Bermuda Corporate Tax.” Bloomberg Tax: “Lawmakers Press IRS on Identity Theft Case Backlogs and Delays.”
| | Steve Martin was the host of the April 22, 1978, episode of “Saturday Night Live.”
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