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 you time and money. Schedule a free consultation with a member of our team here.

FINCEN FILING: Beginning this year, most small companies have a NEW small business filing requirement with FinCEN call the Business Ownership Information Report, that can be time confusing. Failure to file or erroneous filings can result in jail time and up to $10,000 in fines. Our team can handle the filing for you with minimal effort on your end. To get started, schedule a time to speak with us here.

Tax Policy/News:

November 12: IRS Hosts Free Webinar to Help Businesses Meet Beneficial Ownership Reporting Deadline  

The IRS is offering a free, one-hour webinar on November 19, 2024, to assist businesses with new beneficial ownership information (BOI) reporting requirements mandated by the Corporate Transparency Act.  

 Conducted by FinCEN, the webinar will provide guidance on BOI filing procedures, exceptions, and compliance rules.  

 Businesses created or registered before January 1, 2024, must submit BOI electronically to FinCEN by January 1, 2025, detailing key individuals with ownership or control.  

 The session includes a live Q&A and resources for small entities, though no continuing education credits are available. Interested parties can register on the IRS webinar site for the event, which will include closed captioning. 

 November 6: Sen. Hassan Advocates for Immediate R&D Expensing to Boost U.S. Competitiveness  

Senator Maggie Hassan (D-NH) emphasizes the need for restoring immediate expensing for research and development (R&D) expenditures, a key provision that expired in 2022, affecting U.S. manufacturers’ global competitiveness.  

 In a recent interview, Hassan, a Senate Finance Committee member, highlighted her bipartisan efforts with Sen. Todd Young to reinstate the full R&D tax deduction, citing its critical role in fostering innovation, supporting high-paying jobs, and securing national economic and technological leadership.  

 With Congress facing the expiration of key tax provisions from the 2017 Tax Cuts and Jobs Act, Hassan is focused on a tax cut package that not only restores the R&D deduction but also expands the Child Tax Credit and Low-Income Housing Tax Credit.  

 She urges continued advocacy from industry groups, stressing that support from stakeholders is essential to passing pro-growth tax policies that keep American businesses competitive in the global R&D landscape. 

Economic News/Policy:

November 7: Trump’s Tariff Plans Could Drive Up Consumer Prices and Spark Trade Tensions  

President-elect Donald Trump’s proposal to impose tariffs of 10%-20% on all imports, with higher tariffs of 60%-100% on Chinese goods, aims to generate U.S. revenue and protect domestic industries.  

 Trump suggests that this approach could reduce or even replace certain income taxes by charging foreign producers.  

 However, economists warn that these tariffs would raise prices on everyday goods, as U.S. importers typically pass costs to consumers.  

 The Tax Foundation estimates a 10% universal tariff could add $1,253 to U.S. households’ tax burden, while Democrats and other analysts predict costs of $2,600 to $4,000 per household.  

 Experts caution that the policy may also trigger retaliatory tariffs, potentially escalating into a trade war that further drives up consumer costs. 

 November 7: Powell Says Fed Won’t Speculate on Trump’s Economic Impact as Rates Are Cut Again  

The Federal Reserve announced its second consecutive rate cut of 0.25 percentage points, bringing rates to a range of 4.5-4.75% as the central bank aims for a steady approach after aggressive hikes to curb post-pandemic inflation.  

 While Fed Chair Jerome Powell emphasized the Fed’s independence, he refrained from speculating on the economic impact of President-elect Trump’s return, citing uncertainty over the timing and specifics of Trump’s policies.  

 Trump’s economic agenda, which includes tariffs, tax cuts, and corporate tax reductions, has sparked inflationary concerns among economists. However, Trump dismissed these predictions, asserting confidence in his economic strategy.  

 The Fed’s next rate decision in December will be its final adjustment before Trump takes office in January, leaving Powell’s term, which ends in 2026, under potential political pressure as Trump, who initially appointed Powell in 2017, has openly criticized Fed policies on rates. 

 November 6: Trump’s Proposed Tariffs Could Drive Up Inflation and Delay Interest Rate Cuts  

President-elect Donald Trump’s economic plans, including widespread tariffs, tax cuts, and stricter immigration controls, are expected to raise inflation in the U.S. and potentially globally.  

 A stronger U.S. dollar and higher Treasury yields reflect market expectations of inflationary pressure, which could reduce the Federal Reserve’s likelihood of cutting interest rates in 2025.  

 Economists warn that Trump’s proposed tariffs of 10-20% on all imports, with steeper tariffs on Chinese goods, could increase prices for American consumers and raise global inflation if trading partners retaliate.  

 Key trade partners like Mexico, Canada, China, and Germany may face significant economic impacts, with experts predicting a slowdown in global trade and potential economic losses, particularly for German exporters dependent on the U.S. 

Technology:

November 6: White House to Launch AI R&D Competition for Sustainable Chip Manufacturing  

The Department of Commerce has announced a $100 million R&D competition, funded by the CHIPS and Science Act, aimed at advancing AI technologies for sustainable semiconductor production.  

 This initiative will support university-led collaborations that focus on AI-driven autonomous experimentation to improve the environmental impact of semiconductor manufacturing.  

 Over five years, the funding will support at least two major projects targeting goals like energy efficiency, supply chain resilience, and reduced emissions.  

 As demand for AI continues to drive record growth for major chipmakers like Taiwan Semiconductor Manufacturing Co. and Micron, the competition underscores a push to make U.S. semiconductor production both robust and sustainable amidst growing environmental concerns. 

 November 6: Trump’s Victory Likely to Shift AI Regulation Toward a Light-Touch Approach  

Donald Trump’s election win and Republican control of the Senate indicate a possible rollback of Biden’s AI Executive Order (EO), which aimed to enhance AI safety and address ethical concerns.  

 Trump has criticized Biden’s EO, particularly its requirements for AI developers to report model vulnerabilities, and has hinted at favoring minimal federal regulation.  

 While Biden’s policies established the U.S. AI Safety Institute (AISI) and supported responsible AI development, Trump’s camp views these measures as overreach. 

 Analysts expect Trump’s AI policy to focus on national security concerns, such as preventing AI bioweapons, but without adding restrictive regulations. This lighter regulatory approach may spur states like California to implement their own AI rules. Experts also anticipate tightened export controls on AI technologies to China, potentially impacting global AI cooperation and funding.  

 Though Trump has not detailed a comprehensive AI strategy, his stance on trade and visa policies could have significant downstream effects on the AI industry, raising concerns that AI governance may become increasingly partisan. 

Energy and Environmental Policy/News:

November 11: Trump’s Presidency Could Threaten Future of Heat Pump and EV Incentives  

President-elect Donald Trump’s promise to roll back the Inflation Reduction Act (IRA) could affect federal incentives for electric vehicles (EVs) and energy-saving heat pumps.  

 The IRA provides over $8.5 billion in incentives, including up to $14,000 for low- and moderate-income households to install high-efficiency electric appliances and a $7,500 EV tax credit.  

 Though rescinding funds already allocated may be legally challenging and politically risky, Trump could still attempt to halt unawarded funds.  

Meanwhile, 19 states have received funding but not yet distributed rebates, and additional states are in the application process. Legal experts warn that repealing or revising these incentives would be difficult, especially given their popularity.  

 While the $7,500 EV credit remains vulnerable to Congressional review, energy advocates urge Americans to take advantage of these incentives now due to their substantial benefits. 

 November 7: Renewable Energy Stocks Drop on Trump Victory Amid Fears of Policy Shifts  

Renewable energy stocks tumbled following Donald Trump’s election victory, with market fears that his administration’s policies could hurt the industry’s competitiveness.  

 Analysts are divided on whether this will lead to a rush to finalize renewable deals before inauguration or a market slowdown as investors await policy details.  

 Stocks like Sunnova Energy and First Solar showed signs of recovery by Thursday, but concerns persist about tariffs on imported solar panels and steel, which could inflate renewable energy costs.  

 While Trump’s possible repeal of the Inflation Reduction Act worries investors, analysts note it’s unlikely due to its support among key voter groups.  

 Long-term, some experts believe reduced incentives could ease project delays in interconnection queues, potentially stabilizing renewable energy prices despite rising electricity demand from electrification and data center growth. 

 November 6: Trump Expected to Roll Back Environmental Protections, Boost Oil and Gas Production  

Donald Trump’s return to the White House signals a major shift in U.S. energy policy, with plans to roll back environmental protections and increase fossil fuel production. 

 Trump has pledged to withdraw the U.S. from the Paris climate agreement, reverse Biden administration regulations on vehicles and power plants, and redirect unspent Inflation Reduction Act (IRA) funds.  

 While Trump’s impact on short-term fossil fuel production may be limited by market forces, his administration could open more federal land for drilling and reduce regulatory costs for oil and gas companies.  

 The fate of the IRA, which funds climate-friendly technology, depends on House control, with some Republicans advocating to preserve certain credits while Speaker Mike Johnson supports repealing “Green New Deal” policies.  

 Environmental advocates, like former EPA official Stan Meiburg, warn that Trump’s policies could worsen pollution and climate outcomes, as Trump also campaigns against wind energy subsidies and other low-carbon technologies. 

 For Fun:

November 5: World’s First Wooden Satellite Arrives at ISS for Orbital Testing  

LignoSat, the world’s first wooden satellite developed by Kyoto University and Sumitomo Forestry, reached the International Space Station (ISS) aboard a SpaceX Dragon capsule.  

 This 4-inch “cubesat,” made from magnolia wood, will undergo a six-month test to explore wood's durability in space, examining temperature, strain, and radiation effects.  

 Unlike traditional aluminum satellites, wooden satellites would burn up without releasing polluting aluminum oxides, making them a sustainable alternative as Earth’s orbital population grows.  

 Researchers hope that LignoSat’s success could pave the way for eco-friendly satellite technology, potentially supporting future missions to the moon and Mars and revitalizing the timber industry. 

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