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In the blogs: Recovery mode

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Muni bonds and taxes; BE-10 time; a troubling history; and other highlights from our favorite tax bloggers.

Recovery mode

  • Don’t Mess with Taxes (http://dontmesswithtaxes.typepad.com/): As natural disasters continue to break records in number and severity, government agencies help a little — but in many cases, those who survived major disasters must come up with cash for repairs and recovery. Many turn to their largest pot, retirement savings. What to remind them about what federal lawmakers have done to help those who must tap tax-advantaged nest eggs.
  • Yeo & Yeo (https://www.yeoandyeo.com/resources): How victims may also qualify for additional relief, including on amended returns.
  • Current Federal Tax Developments (https://www.currentfederaltaxdevelopments.com/): A chief counsel memorandum addresses the deductibility of theft losses (under Sec. 165) for five hypothetical taxpayers who were victims of scams in 2024.
  • Tax Vox (https://www.taxpolicycenter.org/taxvox): If Congress makes muni bonds taxable, what could happen to states and cities?
  • Turbotax (https://blog.turbotax.intuit.com): If they’re asking a lot of questions about this season (and we bet they are), here’s your cheat sheet.

Getting real (estate)

  • The Tax Times (https://www.thetaxtimes.com): The IRS has new advice regarding transfer pricing adjustments for high-profit-potential intangible property.
  • CLA (https://www.claconnect.com/en/resources?pageNum=0): Lawmakers are under pressure to identify revenue offsets to finance fiscal and tax packages. One such potential offset: curtailing the business-related property tax deduction, which could have consequences for commercial real estate owners, developers and investors.
  • Tax Foundation (https://taxfoundation.org/blog): As the property tax debate continues in Kansas, two proposals recently emerged: a tight levy limit that would give voters the opportunity to approve or reject property tax increases and a proposal allowing taxpayers to protest and overturn property tax increases they disagree with, while increasing state transfers to cities and counties. Should policymakers continue doing more?
  • Institute on Taxation and Economic Policy (https://itep.org/category/blog/): Why lawmakers should improve or implement a circuit breaker program that kicks in to help alleviate the pressure property taxes put on working families’ budgets.

Reshaping obligations

  • Tax Notes (https://www.taxnotes.com/procedurally-taxing): A recent case, In re John Carr Smith, provides a straightforward application of a previous landmark case, United States v. Craft. In the latter, the decision focused on spouses owning property as tenants finding themselves unable to shake off a federal tax lien on one of the spouses. What makes Carr a “sad case” is that Mr. Carr married into the house and contributed nothing to its purchase, yet the IRS will reap a benefit from his ownership interest. 
  • Withum (https://www.withum.com/resources/): Guidance did exist on minimum investment amounts when determining whether an issuer has taken reasonable steps to verify purchasers’ accredited investor status, but further clarification has arrived from the Securities and Exchange Commission about relying on Rule 506(c) of Regulation D.
  • Virginia – U.S. Tax Talk (https://us-tax.org/about-this-us-tax-blog/): A recently leaked memorandum has revealed potential tax reform, including changes concerning foreign-earned income and the corporate income tax rate that could reshape the tax obligations of U.S. persons living abroad and those of multinational business owners.

Finding the way

  • U of I Tax School (https://taxschool.illinois.edu/blog/): How to use the Taxpayer Advocate Service taxpayer roadmap from tax prep through processing, collections, appeals and litigation.
  • Mauled Again (https://mauledagain.blogspot.com/): New bills in the Washington Senate and the Washington House look to impose a state vehicle miles-traveled tax, a different name for a mileage-based road fee.  
  • MBK (https://www.mbkcpa.com/insights): Some nonprofit clients are hesitant to use background checks on board members — a reluctance understandable, but misplaced. Why and how such clients should know their board members as completely as possible.
  • Taxjar (https:/www.taxjar.com/resources/blog): April’s sales tax due dates.
  • The National Association of Tax Professionals (https://blog.natptax.com/): This “You Make the Call” looks at Jim and Sarah, married filing a joint return in 2024. Their modified adjusted gross income was $237,000, and they completed the adoption of a child with special needs in 2024 and have qualified adoption expenses of $10,000. Is their adoption credit limited to $10,000 in 2024?
  • Taxable Talk (http://www.taxabletalk.com/): The BE-10 Survey deadline looms again for large business clients.
  • TaxProf Blog (http://taxprof.typepad.com/taxprof_blog/): A recent paper looks at Colonial America’s intertwining of taxes and slavery.

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Accountants on IRS and PwC layoffs, accounting students and more

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Complimentary Access Pill

Enjoy complimentary access to top ideas and insights — selected by our editors.

This week’s stats focus in part on the job titles seeing the greatest losses at the IRS during layoffs; as well as the states that have proposed or passed alternatives to the 150-hour rule; the percentage of master’s in accounting program applicants since 2020; the number of PwC employees laid off in May; the projected size of Deloitte’s new New York City headquarters; and the amount of 2026 HSA annual contribution limits, depending on coverage.

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CrowdStrike says DOJ, SEC sent inquiries on firm accounting

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CrowdStrike Holdings Inc. said U.S. officials have asked for information related to the accounting of deals it’s made with some customers and said the cybersecurity firm is cooperating with the inquiry.

The Austin, Texas-based company said in a filing Wednesday that it has gotten “requests for information” from the U.S. Department of Justice and the Securities and Exchange Commission “relating to the company’s recognition of revenue and reporting of ARR for transactions with certain customers.” ARR refers to annual recurring revenue, a measure of earnings from subscriptions.

The company said the federal officials have also sought information related to a CrowdStrike update last year that crashed Windows operating systems around the world.

“The company is cooperating and providing information in response to these requests,” the filing states.

U.S. prosecutors and regulators have been investigating a $32 million deal between CrowdStrike and a technology distributor, Carahsoft Technology Corp., to provide cybersecurity tools to the Internal Revenue Service, Bloomberg News first reported in February. The IRS never purchased or received the products, Bloomberg News earlier reported.

The investigators are probing what senior CrowdStrike executives may have known about the $32 million deal and are examining other transactions made by the cybersecurity firm, Bloomberg News reported in May.

Asked for comment about the filing, CrowdStrike spokesperson Brian Merrill said, “As we have told Bloomberg repeatedly, this is old news and we stand by the accounting of the transaction.” 

A lawyer for Carahsoft previously declined to comment on the federal investigations, and representatives didn’t respond to subsequent requests for comment about them.

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Elon Musk urges Americans take action to ‘kill’ Trump tax cut bill

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Tech titan Elon Musk ratcheted up his offensive against Donald Trump’s signature tax bill on Wednesday, urging that Americans contact their lawmakers to “KILL” the legislation.

“Call your Senator, Call your Congressman,” Musk wrote in a social media post. “Bankrupting America is NOT ok!”

The post came one day after Musk lashed out at the tax bill, describing it as a budget-busting “disgusting abomination” as Republican fiscal hawks stepped up criticism of the massive fiscal package. 

Trump hasn’t publicly responded to Musk’s comments, but the White House put out a statement Wednesday saying the legislation “unleashes an era of unprecedented economic growth.” 

And House Speaker Mike Johnson told reporters that Musk is “dead wrong” about the bill and that the tax cuts will pay for themselves through economic growth.

Musk’s public condemnation pits him against the president at a critical time as Trump is personally lobbying holdouts on the bill. His campaign against the legislation threatens to stiffen resistance and delay enactment of the tax cuts and debt ceiling increase. 

Musk has attacked the legislation days after leaving a temporary assignment leading the administration’s Department of Government Efficiency initiative to cut federal spending. The Tesla Inc. chief executive officer’s high-profile role in the Trump administration eroded his business brand and sales of his company’s electric vehicles plunged. 

The House-passed version of the tax and spending bill would add $2.4 trillion to U.S. budget deficits over the next decade, according to an estimate released Wednesday from the nonpartisan Congressional Budget Office.

The CBO’s calculation reflects a $3.67 trillion decrease in expected revenues and a $1.25 trillion decline in spending over the decade through 2034, relative to baseline projections. The score doesn’t account for any potential boost to the economy from the bill, which Johnson and Trump argue would offset the revenue losses. 

Musk, the world’s richest man with a net worth of about $377 billion according to the Bloomberg Billionaires Index, has become a crucial financial backer of the Republican party. After making modest donations most years, Musk became the biggest U.S. political donor in 2024, giving more than $290 million.

Johnson said Musk had promised to help reelect Republicans just a day before savaging Trump’s bill. Musk did not respond to a request for comment. 

Most of Musk’s giving was aimed at electing Trump but he also supported congressional candidates. America PAC, the super political action committee that Musk largely funded, spent $18.5 million in 17 separate House races. Though that total pales in comparison to the roughly $255 million he spent backing Trump, the spending means a lot in a congressional election, where challengers on average raise less than $1 million.

Control of the House will likely be decided by the outcome of fewer than two dozen close races in the 2026 midterm elections. The GOP’s chances of holding their majority would suffer a major blow if Musk were to withdraw his financial support.

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