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Are Pass-Through Businesses “Audit Privileged”?

At a hearing last week, Finance Chair Ron Wyden stated:

More than two out of every three dollars earned by partnerships in this country go to the top one percent of earners. These are sophisticated entities that bring in big revenue. However, the most recent data shows that out of millions of partnership returns filed in 2018, only 140 were audited. If you’re a wealthy tax cheat in a partnership, your odds of getting audited are slightly higher than your odds of getting hit by a meteorite. It’s an audit rate of 0.00004 percent. On the other hand,

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2021-06-15T17:12:58+00:00June 15, 2021|

SALT Parity Bills Hit Governor’s Desk in CO and IL

Our SALT Parity reform bills continue to roll across the country. Since 2018, 13 states have adopted our parity legislation. Colorado and Illinois, whose legislatures recently approved similar bills, are just a Governor’s signature away from becoming states 14 and 15 on that list.
SALT Parity enables S corporations and partnerships to deduct the full amount of their state and local tax (SALT) payments, just like C corporations can. If enacted across the country, we estimate that over 3 million pass-through businesses would receive some $6 billion in annual tax relief, all at no cost to the

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2021-06-11T15:54:15+00:00June 11, 2021|

Revisiting the Outlook for Tax Policy

The Biden administration’s tax proposals pose a triple threat to individually- and family-owned businesses.  They raise taxes on Main Street Employers when they earn income, when they sell the business, and when they pass the business on to their kids.  The business community is understandably alarmed at the prospect that these policies could be enacted, but exactly what are their prospects and what is the timing of potential action?  Here is the latest.

Later, Not Sooner 

Three announcements last week helped clarify the process, timing, and content of a potential tax and spending package in Congress:

2021-06-08T20:31:55+00:00June 8, 2021|

Talking Taxes in a Truck Episode 10 – Tax Notes’ Marty Sullivan Discusses the Treasury’s Green Book, Capital Gains, and DC Hiking Trails

With Treasury’s Green Book hot off the presses, we asked Tax Notes Chief Economist Marty Sullivan to review the ins and outs of the Biden administration’s latest tax proposals – from retroactive capital gains taxes to taxing book income to potential changes on the international front.  Marty gazes into his crystal ball to give us odds on legislative action this year, and then informs us where the best urban hiking trails are.

Our latest “Talking Taxes in a Truck” was recorded on June 2, 2021, and runs 46 minutes long.

2021-06-04T18:10:59+00:00June 4, 2021|

Give FATCA a Chance

Two months ago, we posted a Wire entitled “Hit and Run Economics” that highlighted a new NBER Working Paper – coauthored by Gabriel Zucman – that claimed the Tax Gap is much larger than previous estimates and exceeds $1 trillion a year.

At the time, we predicted the shelf life of the “study” would be a few months, because that’s how long it would take real economists to digest the work and correct it.  Zucman and his frequent collaborators Piketty and Saez have a long history of publishing questionable papers that fail to stand up to scrutiny.

In this case, it only

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2021-05-20T14:18:57+00:00May 20, 2021|