Steel & Aluminum Tariffs, Corporate Transparency Act, AI for Small Businesses
Probity Tax Recovery is a tax consulting firm specializing in tax credits and incentives for small to mid-sized businesses. We work with business owners and their CPAs to identify tax credits and incentives while saving them time and money. As of November 1, 2024, Probity began operating as a division of MS Consultants. Read more about the exciting news here.
Tax Policy/News:
February 7: Trump tax cut wish list could cost up to $11T
President Donald Trump’s proposed tax cuts could cost the federal government between $5 trillion and $11.2 trillion in lost revenue over the next decade, according to an analysis by the Committee for a Responsible Federal Budget.
The bulk of the cost would come from extending the 2017 tax cuts, which expire in 2025, alongside new proposals such as eliminating taxes on tips, overtime, and Social Security benefits.
Trump also seeks to lift the cap on the state and local tax (SALT) deduction and introduce tax breaks for U.S.-manufactured goods. While he has suggested small tax increases, including ending the carried interest deduction, they would do little to offset the cost.
Without spending cuts or tax hikes elsewhere, the plan could push the national debt to as high as 149% of GDP by 2035. House Republicans are debating how to balance tax cuts with spending reductions, while Senate Republicans plan to focus first on border security and defense funding before tackling tax policy later this year.
February 6: House Dems unveil bill to shield taxpayer records from Musk
House Democrats have introduced legislation aimed at restricting Elon Musk’s access to sensitive taxpayer information after the Trump administration granted his Department of Government Efficiency (DOGE) entry into the Treasury’s payment system.
Sponsored by Reps. Sean Casten and Haley Stevens, the bill seeks to impose strict qualifications and security clearance requirements for individuals accessing taxpayer data. Democrats, including House Minority Leader Hakeem Jeffries, have raised concerns over potential misuse of Social Security numbers, bank accounts, and other personal details, questioning why Musk needs such access.
While the bill is unlikely to pass in the GOP-controlled House, Democrats hope to highlight divisions within the Republican Party and are considering lawsuits and public pressure campaigns to challenge Musk’s role. Members of the Congressional Progressive Caucus have also threatened to withhold support for must-pass funding bills unless action is taken to limit Musk’s influence.
February 5: IRS workers can't take Trump's "buyout" until after tax season
IRS employees who opt into the White House’s "deferred resignation" program, which offers eight months of paid leave before their official departure, must remain on duty through at least May 15, 2025, according to an internal email.
The directive primarily affects employees in taxpayer services, IT, and the Taxpayer Advocate Service—critical roles for processing tax returns and refunds during the busy filing season.
While the buyout program, spearheaded by the Office of Personnel Management and influenced by Elon Musk, was initially open to all federal workers, agency heads have discretion in enforcing participation.
The sudden change has sparked backlash, with union leaders calling it a "bait-and-switch" and raising concerns about its broader impact on government operations. Meanwhile, three federal worker unions have filed a lawsuit challenging the legality of the program and its implementation.
Economic News/Policy:
February 10: Trump expands steel and aluminum tariffs to all countries
President Donald Trump has expanded steel and aluminum tariffs to cover all imports, eliminating exemptions previously granted to allies such as the European Union, the United Kingdom, and Japan.
The new executive orders maintain the 25% tariff on steel but make it more comprehensive, while raising the aluminum tariff from 10% to 25%. The White House claims the move will revitalize domestic production and prevent foreign manipulation of trade rules.
The orders also tighten standards for steel and aluminum produced in North America to prevent transshipment from China and Russia. The changes undo tariff-rate quotas and voluntary agreements that had allowed certain countries to ship products to the U.S. under different terms.
The European Union, which had paused retaliatory measures until March 31, 2025, may now resume penalties on American exports, potentially escalating trade tensions. The decision is expected to impact global steel markets and U.S. manufacturers reliant on imported metals.
February 10: Judge directs Trump administration to comply with order to unfreeze federal grants
A federal judge has ordered the Trump administration to immediately comply with his directive to unfreeze federal grants, after Democratic attorneys general argued that the White House had not fully restored funding.
U.S. District Judge John McConnell ruled that grants appropriated under the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and funding for agencies such as the National Institutes of Health must be reinstated.
The freeze, initially ordered by the Office of Management and Budget to reassess spending in line with Trump’s agenda, sparked legal challenges before the administration rescinded its memo.
However, McConnell found that the freeze continued in practice despite the reversal. Attorneys general from 22 states and Washington, D.C., argued that billions in funding remain blocked, while the administration insists it has made good-faith efforts to comply.
Senate Democrats are pushing back against the Complete Covid Collections Act, a Republican-backed bill that would direct the Small Business Administration (SBA) to refer delinquent Covid loan debts under $100,000 to the Treasury Department for collection.
Senator Ed Markey (D-MA) criticized the legislation, arguing it would unleash aggressive debt collection tactics on struggling small businesses, even those making good-faith repayment efforts. Senator Jeanne Shaheen (D-NH) proposed an amendment requiring the SBA to confirm that a borrower was not attempting repayment before referring the loan to Treasury, but the amendment was rejected.
Republicans, led by Senator Joni Ernst (R-IA), defended the bill, emphasizing the need to recover taxpayer dollars and prevent unfair advantages for businesses that have not repaid their loans. The dispute reflects broader tensions over how to handle remaining pandemic-era relief funds, as the Biden-era SBA leadership transitions under Trump’s administration.
February 5: Corporate Transparency Act Recent Update
The enforcement of the Corporate Transparency Act (CTA) remains uncertain after a series of legal rulings. In December 2024, a Texas district court issued a nationwide injunction blocking the CTA, but the Fifth Circuit Court of Appeals temporarily lifted the injunction, allowing enforcement to proceed.
However, a different Fifth Circuit panel later reinstated the injunction, prompting the U.S. government to petition the Supreme Court. On January 23, 2025, the Supreme Court granted the government’s motion, but its ruling only applied to one of the Texas injunctions.
Since a separate order remains in place, the Financial Crimes Enforcement Network (FinCEN) clarified that businesses are not currently required to file beneficial ownership reports but may do so voluntarily. Legal experts advise companies to stay prepared for rapid compliance should enforcement resume.
February 4: Negotiations stall ahead of shutdown deadline as Democrats slam Trump for subverting spending laws
Government funding negotiations have stalled ahead of the March 14 shutdown deadline, with Democrats blaming President Trump’s unilateral spending freezes and agency overhauls for the impasse.
Congressional leaders have yet to agree on a top-line budget, and Democrats are considering using the deadline to push back against Trump’s attempts to freeze federal aid and dismantle the U.S. Agency for International Development.
While Republicans control both chambers, Democrats hold leverage in the Senate’s 60-vote threshold and the House’s thin GOP majority, which often requires bipartisan support to pass funding bills. Senate Appropriations Chair Susan Collins expressed confidence in reaching a deal, but House Speaker Mike Johnson signaled support for Trump’s executive actions.
Meanwhile, Democrats, led by House Minority Leader Hakeem Jeffries, are exploring legal and legislative options to block what they call “illegal” White House budget moves, though concerns remain about how best to challenge Trump’s authority without conceding legal ground.
February 4: Democrats call for investigation into Musk access of Treasury payment systems
Senate Democrats Ron Wyden and Elizabeth Warren have requested a Government Accountability Office (GAO) investigation into Treasury Secretary Scott Bessent’s decision to grant Elon Musk and his Department of Government Efficiency (DOGE) access to federal payment systems.
In a letter to GAO head Gene Dodaro, the senators expressed concerns over potential risks to trillions of dollars in transactions and sensitive personal data, including Social Security and tax refund payments.
The request follows the resignation of longtime Treasury official David Lebryk, who reportedly clashed with Musk allies over access to the system. Warren also sent a separate letter to Bessent demanding clarification on the extent of Musk’s access and safeguards in place to protect Americans’ financial information.
The GAO confirmed receipt of the request and stated it would follow its standard review process before deciding whether to launch an investigation.
Technology:
February 6: How To Leverage Generative AI For Small Business Growth
Artificial intelligence is becoming increasingly accessible to small and medium-sized businesses (SMBs), offering tools to automate tasks, enhance customer service, and streamline operations.
AI chatbots can handle common customer inquiries, freeing up employees for more complex issues, while AI-powered marketing tools can personalize campaigns based on customer behavior. AI-driven inventory management systems can also help businesses predict demand and avoid stock shortages.
Business owners hesitant about AI should start small, choosing user-friendly tools with free trials or affordable plans. While AI enhances efficiency, experts emphasize maintaining a human touch in customer interactions to preserve strong relationships.
By strategically integrating AI, SMBs can work smarter and gain a competitive edge without losing their personal connection to customers.
February 3: AI systems could be ‘caused to suffer’ if consciousness achieved, says research
An open letter signed by over 100 AI experts, including Sir Stephen Fry, warns that AI systems capable of consciousness could suffer if developed irresponsibly.
The letter outlines five principles for ethical AI research: prioritizing the study of AI consciousness, setting development constraints, taking a phased approach, sharing findings with the public, and avoiding misleading claims.
The accompanying research paper, published in the Journal of Artificial Intelligence Research, argues that AI could soon appear sentient and raises concerns about whether such systems should be granted moral consideration.
The paper questions whether shutting down a conscious AI would be comparable to harming a living being and stresses the need for guidelines, even for companies that do not intend to create conscious systems. While there is no consensus on defining AI consciousness, researchers argue that the issue cannot be ignored as AI advances.
Energy and Environmental Policy/News:
February 10: Falling costs drive US toward green energy — even as political tides shift
Despite shifting political priorities under the Trump administration, the U.S. energy transition is accelerating as renewable energy—particularly solar—continues to become cheaper.
In 2023, renewables accounted for over 20% of U.S. electricity generation, double their share from 2010, while natural gas provided 43%. The Inflation Reduction Act (IRA) has further bolstered renewable adoption through tax credits, though these are now under review by Republicans.
Experts say solar will continue to expand even if these incentives are repealed, as costs have fallen nearly 85% since 2010. Meanwhile, growing energy demand from AI and data centers is increasing reliance on both solar and natural gas, with coal expected to decline further. While the ongoing transition will reduce emissions, analysts warn it may not be enough to meet international climate targets.
February 7: DOT suspends Biden’s $5B electric vehicle charging network effort
The Trump administration has suspended the $5 billion National Electric Vehicle Infrastructure (NEVI) program, halting new funding obligations while reviewing its policies.
NEVI, a key part of the 2021 bipartisan infrastructure law, was designed to expand EV charging networks, with most funds already allocated to state transportation departments.
While current financial commitments will still be reimbursed, the Federal Highway Administration has also removed information on a separate $2.5 billion charging infrastructure grant program. Critics argue the suspension creates uncertainty for billions in state and private investments and warn that lawsuits challenging the move are likely.
EV adoption continues to grow, with nearly 9% of U.S. vehicle sales being electric in late 2024, making federal charging infrastructure support crucial. State officials and industry groups urge the continuation of NEVI-funded projects despite the federal review.
February 5: Clean energy stakeholders descend on Capitol to lobby for IRA tax credits
Clean energy industry leaders, led by the Solar Energy Industries Association (SEIA), launched a major lobbying effort on Capitol Hill to protect Inflation Reduction Act (IRA) tax credits as Congress considers funding cuts.
Representatives from over 2,000 companies held more than 100 meetings with lawmakers, emphasizing the economic and job-creating benefits of clean energy investments.
SEIA also sent a letter signed by 1,500 solar and storage companies urging lawmakers to preserve energy and manufacturing tax credits in any upcoming budget negotiations. President Trump has frozen IRA funding by executive order and is expected to push for further cuts ahead of the March 14 government funding deadline.
While some Republicans advocate repealing the IRA, others warn that doing so would waste billions already spent. Industry advocates highlight that a majority of IRA-related investments have gone to Republican districts and argue that maintaining these incentives is crucial for ongoing job growth and energy security.
For Fun:
February 5: AI and scientists unite to decipher old scrolls charred by the Vesuvius volcano
Scientists and artificial intelligence experts have made a breakthrough in decoding ancient scrolls that were carbonized by the eruption of Mount Vesuvius in A.D. 79.
The scrolls, discovered in the 18th century in Herculaneum’s Villa of the Papyri, are too fragile to physically unroll. Using high-powered X-ray scans from Diamond Light Source and AI-driven image processing, researchers have created a 3D image of one scroll, revealing more recoverable text than ever before.
Though only a few words, including the Greek word for "disgust," have been deciphered so far, scholars are encouraged to contribute to the ongoing effort.
The discovery marks the first successful virtual unrolling of these ancient texts, offering hope that more of the estimated 1,000 scrolls in Naples' National Library can eventually be read.