White House Report, 2017 Tax Cuts, and the Artificial Intelligence Road Map
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Tax Policy/News:
May 13: White House Report Paints Dire Picture of U.S. Research Infrastructure
A White House interagency assessment highlights the critical state of many U.S. federal research facilities, revealing that approximately half are in "poor or critical condition" and many are well beyond their 40-50-year estimated lifespan.
The report underscores the challenges faced by U.S. scientists forced to conduct cutting-edge research in outdated facilities designed in the 1950s, with nearly 40% of Department of Energy facilities and over 60% of the National Institute of Standards and Technology's space deemed substandard.
Additionally, around 75% of NASA's facilities have surpassed their intended lifespan, primarily due to prolonged underfunding and neglected maintenance.
This aging infrastructure not only hampers the U.S.'s ability to maintain a competitive edge in global research—evidenced by China's advancements in supercomputing and Europe's in weather forecasting—but also affects the country's ability to attract and retain top scientific talent.
The report advocates for benchmarking U.S. facilities against those internationally and suggests this could help in fostering greater international cooperation.
In response to ongoing concerns about identity theft and refund fraud targeting tax professionals, the IRS has implemented enhanced security measures for the Centralized Authorization File (CAF) program and introduced stricter guidelines for requesting client transcripts by phone.
James Clifford, Director of IRS Return Integrity and Compliance Services, emphasized the importance of protecting tax professionals and their clients due to the sensitivity of the information involved.
Compromised CAF numbers, which pose a significant risk, are now placed in a suspended status for further review, and if confirmed as compromised, appropriate actions are taken to address the issue.
For transcript requests, tax professionals must now use the Practitioner Priority Service line and undergo enhanced authentication to receive transcripts either via the Secure Object Repository or by mail to the taxpayer's address.
The IRS also warns tax professionals to be vigilant against unsolicited scam emails seeking sensitive information such as CAF and EFIN numbers, advising them to report such emails to phishing@irs.gov.
These measures are part of the IRS’s continued efforts to work with the tax professional community to ensure the safety of critical taxpayer information.
Economic News/Policy:
May 10: Biden White House highlights a coming showdown with GOP over 2017 tax cuts that are due to expire
The upcoming expiration of the 2017 tax cuts, which could nearly total $4 trillion, presents a major challenge for the next U.S. president.
Lael Brainard of the White House National Economic Council advocates for increasing tax rates on corporations and the wealthy to maintain middle-class support without raising taxes on those making less than $400,000.
This stance contrasts sharply with Republican views, which favor extending the cuts to avoid economic fallout and increased national debt.
As the debate intensifies, it underscores a broader political struggle over fiscal responsibility and economic growth strategies, with potential implications for middle-class financial security and overall economic stability.
Technology:
May 13: Schumer’s long-awaited AI ‘road map’ is coming this week. It will cost billions.
A bipartisan group of U.S. senators, led by Majority Leader Charles E. Schumer, is set to release a comprehensive "road map" for artificial intelligence (AI) regulation, which proposes directing billions into AI research and development while tackling its potential risks.
This strategic plan, informed by a 2021 National Security Commission on Artificial Intelligence report, suggests allocating about $32 billion, or 1% of U.S. GDP, to enhance AI capabilities across various federal agencies.
Although not yet legislative, the initiative aims to guide Senate committees in drafting bills that address AI's impact on sectors like military, healthcare, and labor.
The plan also emphasizes the development of sector-specific AI regulations, transparency measures, and maintaining competitive military AI advancements.
It comes amid increasing AI advancements by U.S. tech companies and a push by Schumer for swift establishment of AI regulatory guardrails, reflecting bipartisan efforts despite concerns about legislative gridlock in an election year.
May 8: US chip manufacturing capacity projected to triple by 2032, fueled by CHIPS Act: Industry leader
According to a new report by the Semiconductor Industry Association (SIA) and the Boston Consulting Group, U.S. chip manufacturing capacity is projected to triple by 2032, which will increase the U.S.'s share of global semiconductor production from 10% to 14%.
This growth is largely attributed to the $50 billion CHIPS Act, signed by President Biden in 2022, which has stimulated nearly half a trillion dollars in investments for U.S. chip fabrication facilities.
Significant investments by major companies like Intel, which has invested over $100 billion in expanding its operations across several states, are central to this expansion.
Despite these advancements, challenges such as oversupply concerns, particularly for legacy chips, and a workforce shortage, with an estimated gap of 67,000 workers needed in the semiconductor industry this decade, remain critical issues that need addressing to maintain and enhance the U.S.'s competitive edge in the global semiconductor market.
Energy and Environmental Policy/News:
May 10: Brown to join Manchin on measure to undo electric car tax credit exemption
Senator Sherrod Brown of Ohio, a vulnerable Senate Democratic incumbent, has aligned with Senator Joe Manchin of West Virginia in supporting a resolution to repeal Biden administration rules that allow certain China-made battery components to qualify for an electric vehicle (EV) tax credit.
The Treasury Department's recent rule permits EVs to qualify for this credit, originally intended for American-made vehicles, even if they incorporate some parts manufactured in China, such as graphite.
Manchin, who is not seeking reelection, criticized the exemptions and promised to use the Congressional Review Act (CRA) to overturn this rule, which allows a simple majority in Congress to reverse executive decisions.
Both senators argue that the tax credit should support American manufacturing and workers, not benefit Chinese companies.
Despite Brown's generally less confrontational approach towards the Biden administration compared to Manchin, he has supported similar legislative actions against other administration policies.
The resolution is likely to pass the Senate with Republican support, though President Biden is expected to veto it.
May 10: Green transition is stitched into the tax code: White House economist
White House Council of Economic Advisers Chair Lael Brainard asserted that the sustainable energy provisions of the 2022 Inflation Reduction Act (IRA) would be difficult for Republicans to reverse, even if they gain congressional majorities.
By integrating these provisions into the tax code and incentivizing rather than mandating behavior changes, the IRA has embedded these policies deeply into the economic framework.
The Act has spurred significant clean energy projects across the country, including substantial tax credits for both households and businesses that cover a range of technologies from solar electricity and fuel cells to energy efficiency upgrades like home insulation and electric vehicle chargers.
Despite opposition from some Republicans, others have praised the economic growth and job creation resulting from these initiatives, as seen in the construction of new battery and electric vehicle plants in states like Arizona and Tennessee, highlighting the local and regional economic benefits spurred by the IRA.
May 9: IRS: Home improvements could help taxpayers qualify for home energy credits
The Internal Revenue Service (IRS) is reminding taxpayers that they can qualify for home energy credits if they make certain energy-efficient updates to their homes, as outlined by the Inflation Reduction Act of 2022.
Taxpayers are eligible for two types of credits: the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit.
For the former, improvements such as installing energy-efficient windows, doors, insulation, and certain heating and cooling systems can earn up to $3,200 in nonrefundable credits.
For the latter, investments in solar panels, wind turbines, geothermal heat pumps, and other renewable energy technologies can receive a 30% credit with no annual limit, applicable through 2032.
Both homeowners and renters, including second-home owners, can claim these credits by using Form 5695 during tax filing.
Detailed eligibility requirements and guidelines are available on the IRS and Energy.gov websites, encouraging taxpayers to maintain good records of their energy improvements to support their claims.
For Fun:
May 10: Toddler born deaf can hear after gene therapy trial breakthrough her parents call "mind-blowing"
In a groundbreaking gene therapy trial conducted by Cambridge University, 18-month-old Opal Sandy, born with genetic deafness due to a defective OTOF gene, can now hear for the first time.
The trial involved a surgical procedure where Opal received an infusion of a functional copy of the OTOF gene into her right ear, significantly improving her hearing within weeks to near normal levels.
This innovative approach, which bypasses traditional devices like cochlear implants, has shown promising results, allowing Opal to respond to sounds as soft as whispers and even start speaking words like "Mama" and "Dada."
Her successful treatment, part of the broader Chord trial spanning multiple international sites, marks a significant advancement in gene therapy for treating congenital deafness, offering hope for similar cases.