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The IRS and the Treasury Department have released final regulations on the transfer of clean energy manufacturing, investment, and production tax credits. The rules aim to increase investment in clean energy technologies by making tax incentives transferable between project developers and investors. The Inflation Reduction Act created new credit delivery mechanisms that allow various entities to leverage clean energy tax credits. The regulations also include special rules for excessive credit transfers and recapture events, as well as a mandatory IRS pre-filing registration process. The Inflation Reduction Act's transferability provisions enable businesses to transfer clean energy credits to a third party in exchange for immediate funds. The final regulations affirm last June's proposed transferability guidance and provide clarity on financing clean energy and manufacturing projects. The IRS confirmed that project owners can obtain loans secured by a tax credit sale agreement. The market for transferable tax credits is expected to accelerate rapidly with the release of these final rules.

 

Accounting Today

CPA Practice Advisor

Tax Notes

A bill called the You Earned It, You Keep It Act has been introduced to eliminate taxes on Social Security benefits. The bill, introduced by by Rep. Angie Craig (D-MN), aims to extend Social Security solvency for 30 years by eliminating federal income tax on benefits and raising the payroll tax for high earners. However, the bill's passage is uncertain due to political hurdles and concerns about breaking tax promises. Currently, some older Americans are surprised to discover that a portion of their Social Security benefits are taxable. The Social Security trust funds are projected to run low by 2031, and the bill seeks to address this issue. The You Earned It, You Keep It Act would allow Social Security to make all scheduled payments in full through 2054. However, skeptics doubt the bill's chance of passage, and it may not be the final solution to the Social Security shortfall.

 

US News and World Report

The IRS has created an Alternative Dispute Resolution Program Management Office to help taxpayers resolve tax disputes earlier and more efficiently. The office will collaborate with the agency's business operating divisions to make its ADR programs more attractive and accessible. The ADR PMO will pilot changes to fast-track settlement and remove barriers to participating in post-appeals mediation. It also plans to test programs that allow Appeals to help resolve or mediate disputes earlier in the examination process. The new office will collaborate with the IRS business operating divisions to perform outreach and education, training and support of mediators, data collection, and monitoring of the effectiveness of ADR programs. Michael Baillif will be the director of the new office. Proposed ADR enhancements reflect input from stakeholders and recent reports from the Government Accountability Office and the Taxpayer Advocate Service. The office is still developing the proposed pilots and changes.

 

Bloomberg Tax

Accounting Today

Tax Notes

Kansas Gov. Laura Kelly has vetoed a $1.5bn tax cuts package for the second time in three months, deeming it "too expensive." The package, which had bipartisan support in the Republican-controlled Legislature, included income, sales, and property tax cuts. Ms. Kelly immediately proposed her own tax cuts worth approximately $1.3bn over the next three years, but the top Republican in the Kansas House dismissed her proposal. The vetoed bill aimed to move Kansas to a single personal income tax rate, a move supported by other GOP-led states. The governor's veto has sparked a divide among Democrats, with some opposing the bill and others potentially breaking with Ms. Kelly. The vetoed bill also included provisions to eliminate income taxes on Social Security benefits and reduce property taxes for public schools. The new plan retains the sales tax and Social Security provisions, while keeping all three personal income tax rates and lowering them. Republicans argue that surplus revenues disprove Ms. Kelly's concerns about future fiscal stability.

 

US News and World Report

Nebraska Gov. Jim Pillen has signed a law which makes changes to the Firefighters Retirement payroll contribution tax rates. The participating firefighter retirement contribution rate increases in steps from 2024 to 2026, reaching 12.7% of salary beginning October 1st 2026. The contribution rate for first class cities with firefighters participating in a retirement system increases from 2025 to 2026, reaching 15% beginning October 1st 2026. The law is effective three calendar months after the end of the legislative session.

 

Bloomberg Tax

BILL Accounting Firm Automation Opportunity Report

Automation has become widespread across diverse industries. For accounting firms, it collects scattered information and transforms it into valuable insights, increasing productivity and empowering firms to better advise their clients.

In this report, more than 1,000 accounting firm professionals shared their opinions on the impact of financial automation on their firms. Of them, 89% said automation in financial operations makes their firm more profitable and efficient. Dive in to gain insights on:

• How automation boosts client advisory services (CAS) delivery and results
• The benefits of a unified automation for AP, AR, spend, and expense management
• The effect of automation on the competitive landscape 
• Areas of opportunity to expand financial automation

Download The Survey

 

The Registered Apprenticeship for Finance Business Partners, launched by AICPA & CIMA, has expanded to Florida. The program aims to enhance the talent pipeline in the state by providing instruction, on-the-job training, and mentorship to accounting and finance professionals. It offers a pathway to the Chartered Global Management Accountant (CGMA) designation. Tom Hood, EVP of Business Growth & Engagement at AICPA & CIMA, emphasized the importance of skills development and career progression in today's rapidly changing business landscape. Joanne Fiore, VP of Pipeline & Apprenticeships at AICPA & CIMA, highlighted the program's growth in Maryland and its inclusion of apprentices from over 15 industries.

 

CPA Practice Advisor

The U.S. economy continued growing in the first quarter, albeit at a slower pace, but persistently high inflation continues to confound investors’ hopes that the Federal Reserve will begin slashing interest rates in the coming months.  The Commerce Department said Thursday that GDP expanded at a 1.6% seasonally- and inflation-adjusted annual rate, some way below the 2.5% gain projected by economists in a Bloomberg survey. Consumer spending increased 2.5% in the period, down from a 3.3% gain in the fourth quarter and below the 3% Wall Street estimate. Fixed investment and government spending at the state and local level helped keep GDP positive on the quarter, while a decline in private inventory investment and an increase in imports subtracted. Net exports subtracted 0.86 percentage points from the growth rate. The personal consumption expenditures price index, a key inflation variable for the Federal Reserve, rose at a 3.4% annualized pace for the quarter, its biggest gain in a year. “This was a worst of both worlds report – slower than expected growth, higher than expected inflation,” said David Donabedian, chief investment officer of CIBC Private Wealth U.S. “We are not far from all rate cuts being backed out of investor expectations. It forces [Fed Chair Jerome] Powell into a hawkish tone for next week’s [Federal Open Market Committee] meeting.”

 

USA Today

CNBC

Washington Examiner

Wall Street Journal

Pending home sales posted a bigger-than-expected increase in March, as buyer demand held relatively steady in the face of the 30-year mortgage rate inching toward 7%. The National Association of Realtors found that home sales based on contract signings climbed 3.4% last month, significantly ahead of the 0.3% decline forecast by economists polled by FactSet. Contract signings rose across the country in March from the prior month, except in the Midwest. The median U.S. home price was $393,500 last month, up 4.8% from a year earlier and the highest level since August 2023. It was also the highest March price on record. Inventory of unsold homes rose 4.7% in March from the prior month to 1.11m units, and was up 14.4% from a year earlier, according to NAR data. “Pending home sales probably will drop back significantly over the next couple of months. Sales cannot defy weaker mortgage demand indefinitely, and applications have continued to soften in April,” commented Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.

 

CNN	Market Watch

Initial jobless claims fell by 5,000 to 207,000 in the seven days to April 20th, the Commerce Department reported Thursday, the lowest level since the week ended February 17th. Economists surveyed by the Wall Street Journal had estimated that new claims would increase 3,000 to 215,000. The four-week moving average dropped 1,250 to 213,250, while continuing claims, reported with a one-week lag, fell 15,000 to 1.781m.

 

ABC News

Market Watch

Reuters

RTT News

Craft retailer Joann has received approval from a U.S. bankruptcy judge for a restructuring plan that will eliminate $505m in debt and allow all 815 retail locations to remain open. The plan, which was unanimously voted for by Joann's creditors, will result in no change for the Ohio-based company's 18,000 employees or store landlords. Joann entered Chapter 11 bankruptcy in March and is expected to emerge from bankruptcy by April 30th.

 

Reuters

Two crypto industry trade associations, the Blockchain Association and the Crypto Freedom Alliance of Texas, have filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) to block a new rule that expands the regulator's interpretation of what constitutes a "dealer" of securities. The associations argue that the SEC exceeded its authority by adopting an unclear rule that conflicts with existing securities regulations. The rule aims to enforce stricter oversight and risk management controls on proprietary traders and other firms in the U.S. Treasury market. However, the crypto groups claim that the rule could potentially harm the digital assets industry. The lawsuit seeks to declare the rule arbitrary and capricious and asks for its complete removal. The SEC spokesperson stated that the commission will vigorously defend the rule in court. This is the second lawsuit challenging the SEC's rule to be filed in Fort Worth, Texas. The case is related to another lawsuit filed by groups representing the private fund management industry. The plaintiffs' case has been marked as related to the previous lawsuit and may be assigned to the same judge. The case is Crypto Freedom Alliance of Texas, et al, v. Securities and Exchange Commission, U.S. District Court for the Northern District of Texas. The plaintiffs' legal representation includes Jeffrey Wall of Sullivan & Cromwell and Randy Gordon of Duane Morris.

 

Reuters

As the range of digital goods and services expands, the tax issues associated with them have grown, reports Roger Russell in Accounting Today. He says that one of the most complicated issues is digital bundling. Retailers have been collecting and remitting taxes for bundled items, but determining what should be charged has been a struggle. The Multistate Tax Commission is studying digital goods bundling to find a definition that represents what's being sold. The complexity arises from the creative ways businesses sell goods, especially digital ones. Russell notes that states have specific rules for digital goods and services, but as everything goes digital, the situation is expected to worsen. The safest practice for sellers, he contends, is to itemize each item and only charge tax on taxable items. Businesses and tax authorities need to adapt to this brave new world of bundled digital goods.

 

Accounting Today

Tax authorities in the Netherlands have restricted employee access to internal systems, after a KPMG report revealed that the tax administration was not sufficiently aware of corruption risks. The State Secretary for Tax, Marnix van Rij, announced that the administration is responding to the report's conclusions by limiting employee access to information and enhancing monitoring capabilities. These changes are expected to improve security but may result in delays in providing services to taxpayers. The tax office is taking action to address the corruption risks and ensure a more secure environment.

 

Bloomberg Tax

The number of births in the United States fell by 2% in 2023, according to a report from the CDC. The decline was driven by a decrease in birth rates among older teenagers and women aged 20-24. The total number of births dropped to 3,591,328 in 2023 from 3,667,758 the previous year. This decline brings the U.S. back in line with the 2% decrease seen between 2015 and 2020. Birth rates among women aged 25-34 fell by about 2.5%, while births among women aged 20-24 fell by 4% to a record low. Teen birth rates also reached a record low, with a 3% decline for teenagers aged 18-19. Births declined for all races except Native Hawaiian and Pacific Islander women. Cesarean section deliveries increased, likely due to the rising average age of mothers. The rate of cesarean section deliveries rose to 32.4%, the highest since 2013. The report highlights the challenges faced by older women during delivery.

 

Reuters