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President-elect Donald Trump has proposed eliminating the federal electric vehicle tax credit established by the Inflation Reduction Act, which could save taxpayers an estimated $2.5bn over the next decade. Demand for the Massachusetts MOR-EV program, which offers rebates for electric and fuel cell vehicles, surged in 2023, with 9,265 rebates valued at over $33.6m, a 350% increase from the previous year. However, the program may run out of funding by next June. The agency overseeing it noted that legislative action is required “if the program is to continue.” Critics argue that the program primarily benefits affluent consumers, with Paul Craney from the Massachusetts Fiscal Alliance stating: “Electric vehicles are widely considered a luxury item”. Massachusetts aims for 300,000 electric vehicles by 2025, but only 75,000 were registered as of July.

 

CPA Practice Advisor

The Baltimore City Council has unanimously approved a bill to significantly increase the property tax rate on vacant homes, tripling it by July 1st 2026, and further increasing it to four times the normal rate by July 1st 2027. City Council President Nick Mosby stated: “This puts Baltimore in a different perspective of dealing with the vacancy that we've seen throughout East and West Baltimore for decades.” The tax hike is set to expire in 2029 and awaits Mayor Brandon Scott's signature. In support of this initiative, state housing Secretary Jacob Day announced a commitment of $1bn over the next 15 years to address vacant homes, while Mayor Scott estimates a total investment of $3bn for the 15-year plan. Currently, Baltimore has approximately 13,000 vacant homes, with a goal to transition at least 5,000 into homeownership or other positive outcomes in the next five years.

 

The Baltimore Sun

California Gov. Gavin Newsom has approved Assembly Bill 2555, which extends the use tax exemption for medicinal cannabis donations. This legislation aims to alleviate the tax burden on charitable cannabis donations, thereby enhancing patient access to medicinal cannabis. The exemption applies to donations made by licensed cannabis retailers to patients or other licensed retailers. As stated in the bill, "the cannabis retailer that ultimately donates the medicinal cannabis must certify in writing" that the product will be used as prescribed. Organizations interested in this exemption must ensure compliance with specific provisions, including maintaining documentation for seven years. The use tax exemption is set to last until January 1st 2030, with ongoing evaluations of its impact on tax revenue and patient assistance. The California Legislative Analyst's Office reported a tax revenue loss of $1.6m from 2020 to 2023 due to similar exemptions. Given the support for AB 2555, its renewal seems likely.

 

Bloomberg Tax

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The FASB has proposed a new accounting standards update to provide guidance on how business entities should account for government grants. Currently, U.S. GAAP lacks specific rules, leading many businesses to rely on IAS 20 by analogy. The proposed update aims to reduce variability in accounting practices by incorporating IAS 20 with targeted improvements. Jackson Day, the FASB's technical director, emphasized that "It will not be a cut and paste of IAS 20," highlighting that the scope and recognition thresholds will differ. The update will clarify how to recognize, measure, and present government grants, including those related to assets and income, and will require disclosures about the nature and terms of the grants. FASB is seeking comments on the proposal by March 31st 2025.

 

Accounting Today

CPA Practice Advisor

The Accountant

AICPA & CIMA have been designated as Apprenticeship Ambassadors by the U.S. Department of Labor’s Office of Apprenticeship. The initiative aims to create a national network to promote and diversify Registered Apprenticeship programs. John Ladd, Administrator of the U.S. DOL Office of Apprenticeship, stated, “We welcome your partnership in promoting, expanding, and diversifying Registered Apprenticeship.” The AICPA & CIMA's involvement will enhance workforce development, address the accountant shortage, and provide pathways for underrepresented groups to enter the accounting profession. Tom Hood, CPA/CITP, CGMA, emphasized the importance of apprenticeships, saying, “Together, we can empower individuals to pursue skills that lead to fulfilling careers.” This recognition positions the AICPA & CIMA to influence apprenticeship standards and drive innovation in talent development within the accounting field.

 

CPA Practice Advisor

H&R Block and Intuit shares dropped 8.2% and 5.1% respectively on Tuesday, following reports that President-elect Donald Trump's Department of Government Efficiency (DOGE), which is run by billionaires Elon Musk and Vivek Ramaswamy, is looking at developing a free app for people to file their taxes. The DOGE discussions follow the roll out of a pilot program from the IRS for taxpayers to file their returns for free online as part of the Biden administration’s Inflation Reduction Act. Jefferies wrote that the selloff in Intuit was “unwarranted,” as an app is “unlikely to be a high priority in a long list of initiatives” to reduce government waste, while the IRS pilot program “had little success.” More than 100,000 taxpayers used the new Direct File program to file their taxes this year, which marked the first time the system was in operation, according to the Treasury Department. 

 

Bloomberg

CBS News

CNBC

U.S. housing starts declined in October to the slowest pace in three months, as Hurricanes Helene and Milton depressed activity in the South. The Commerce Department reported Tuesday that housing starts decreased 3.1% last month to a 1.31m annualized rate. New single-family home construction fell 6.9% to a 970,000 annualized rate in October. Multifamily housing starts increased 9.6%, the first gain in three months. Building permits, a proxy for future construction, eased 0.6% to a 1.42m annualized rate. Starts dropped 8.8% in the South, and nearly 33% in the Northeast, although in the West new construction jumped to its highest level since the start of the year. "Despite the weather impact on building down in the South, the recession in residential housing construction remains deep in the woods with no daylight seen for buyers facing supply shortages as they hunt for new single-family homes," said Christopher Rupkey, chief economist at FWDBONDS. "The housing shortage and affordability issues will remain unless there is a big jump in new construction."

 

Bloomberg

Reuters

Archer-Daniels-Midland Co. (ADM) has restated its earnings following the identification of accounting errors, a crucial move to restore investor confidence. The Chicago-based company clarified that its consolidated results for 2023 and the first two quarters were unaffected by the review. The restatements addressed overestimated intersegment sales for 2023, which were previously inflated by $1.28bn. Despite these adjustments, ADM's operating profits for its three units remained unchanged. The company has faced significant challenges since January, including a loss of billions in market value and investigations by the Department of Justice and Securities and Exchange Commission. As part of its recovery efforts, ADM has appointed AT&T Inc.'s top lawyer to its board and implemented new controls.

 

Accounting Today

Criminal defense lawyer Abbe Lowell has asked a federal judge to throw out a lawsuit from two IRS agents accusing him of defamation over his actions while defending President Joe Biden’s son Hunter against tax charges. Gary Shapley and Joseph Ziegler say that Mr. Lowell falsely suggested that they illegally disclosed grand jury material and taxpayer information; however, the lawyer says his actions were lawful. Mr. Lowell, a partner at law firm Winston & Strawn, said his statements condemning purported leaks in the Biden case were protected legal opinions and not provable false statements of fact. “Plaintiffs may feel very strongly that they acted lawfully, but Mr. Lowell holds very different views — and has every right to say so,” his attorneys told U.S. District Judge Richard Leon. The case is Gary Shapley and Joseph Ziegler v. Abbe Lowell, U.S. District Court for the District of Columbia, No. 1:24-cv-02646-RJL.

 

Reuters

The IRS has successfully persuaded a federal judge to dismiss Arizona's lawsuit challenging the taxation of state rebates sent to residents in 2023, citing lack of standing. Arizona claimed it lost approximately $480m in transaction privilege taxes due to the federal tax on the rebates, arguing that residents would have spent the money within the state. However, Judge G. Murray Snow of the US District Court stated: “federal courts have held that the loss of state tax revenue generally does not constitute an injury in fact for the purposes of standing.”

 

Bloomberg Tax

The Tenth Circuit is set to review Liberty Global's $110m refund claim, which hinges on a loophole in the 2017 Republican tax law. Tax advisers suggest that this case could enhance the IRS' ability to combat tax avoidance strategies.

 

Bloomberg Tax

Indonesia is contemplating a new tax amnesty program, according to Mukhamad Misbakhun, head of the parliamentary finance commission. This would mark the country's third such initiative in a decade, despite concerns that repeated offers may foster tax avoidance. Previous amnesties in 2016 and 2022, during Joko Widodo's presidency, uncovered more than $340bn in unreported assets by offering lower tax rates for disclosures. Although Widodo had vowed against further amnesties, Misbakhun emphasized the need for such a program to address past mistakes while promoting taxpayer compliance. “This is a new government,” he remarked, indicating a potential shift in approach under President Prabowo Subianto, who took office last month and has committed to increasing revenue to fund his platform.

 

Business Times SG

Spain's economy minister, Carlos Cuerpo, has called on G20 leaders to take decisive action towards implementing a global minimum tax on billionaires, highlighting that recent election results are indicative of a popular demand for wealth redistribution. Speaking during a visit to London before the gathering of G20 leaders in Rio de Janeiro this week, Cuerpo said: “There is this moment where you have to be brave and where you just have to do things that you are convinced are right . . . There is an element here of redistribution of wealth that, if we listen carefully to the results of many of the elections that have taken place over the last years, that has been demanded by our citizens, by our population. So we have to somehow respond to that.” In July, finance leaders from every G20 country agreed to “engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed.” Cuerpo said he would push to the put this plan on the agenda at the UN development finance summit in Seville next summer.

 

The Guardian

TIGTA, the Treasury Inspector General for Tax Administration, is celebrating its 25th anniversary with a social media campaign while the Senate Finance Committee reviews a new inspector general nominee following the passing of J. Russell George. Established by the IRS Restructuring and Reform Act of 1998, TIGTA has published over 3,000 reports, claiming to have generated $383bn in benefits through improved IRS operations. The agency has also referred nearly 32,000 cases of IRS employee misconduct and 5,400 for criminal prosecution. IRS Commissioner Danny Werfel stated: "TIGTA helps ensure our agency is accountable for the work we do." The campaign will highlight TIGTA's achievements and insights on platforms like LinkedIn and X.

 

Accounting Today