Federal

Annual Ritual

The Budget and Accounting Act of 1921 established the requirement that the President submit a budget to Congress for the upcoming fiscal year.[i] Among other things, the proposed federal budget affords the President an opportunity to identify priorities for the next fiscal year, to quantify how much the Administration expects it will cost the government to attain the President’s goals, and to explain how and from what sources the funds needed to cover these expenses will be raised.…

Continue Reading The President’s 2024 Federal Budget: “Reforming” the Taxation of High-Income Taxpayers

On Monday, February 20, we celebrate the birthday of George Washington.[i]

We honor this extraordinary individual who, in 1775, was unanimously selected by the otherwise fractious Continental Congress as the commander in chief of the Continental Army, whose dedication to the Cause and loyalty to his men held the Army together during the most challenging times of the Revolution, who voluntarily returned to private life following the surrender of the British,[ii] who was unanimously chosen to preside over the Constitutional Convention of 1787, who was unanimously elected[iii] in 1789 as the first President of the United States, who served two four-year terms[iv] as President before voluntarily returning once again to private life, who was posthumously promoted in 1976 to the rank of General of the Armies of the United States, and whose birthday the U.S. Senate has observed every year since 1896 with the reading of his Farewell Address.[v]…

Continue Reading George Washington on Debt and Taxes

Lately I’ve been thinking about the many ways by which members of the public transfer funds to government and the many reasons for which such transfers are made. After all, we’re still in the “season of giving.”[i]…

Continue Reading New York’s “No-Longer-a-Sin” Taxes – Effective? Progressive? Neither?

I am guessing that, later this week, many if not most of us will celebrate our uniquely American holiday, Thanksgiving Day. Hopefully, we will be fortunate enough to spend the day and share a meal with family and friends. With a bit of luck, politics will not find its way into our conversations and work will not intrude upon our time at home.

I’m willing to bet that turkey[i] will be on the menu – whether roasted or fried, whole, quartered, or segmented in some other way[ii] – alongside lasagna, moussaka, tandoori chicken, sauerbraten, rice and beans, perogy, goulash, couscous, kebab, borscht, empanada, chicken teriyaki, falafel, lamb, or whatever else our people brought with them when they came to this country.

As wonderful as the Thanksgiving holiday is, for historical reasons I have always associated it with federal taxes. Wait a minute, just hear me out.…

Continue Reading Thanksgiving and. . . Taxes?

The Mid-Terms

With 50 seats in the Senate, the Dems still control that Chamber. A win in the Georgia runoff, however, may lessen the burden for Majority Leader Schumer by, perhaps, neutralizing the significance of a certain member of his own party.[i]

Meanwhile, the GOP has claimed “control” of the House by a very thin margin,[ii] but the party’s leadership is already being challenged by its more conservative members.[iii]

On the other side of the aisle, moderate Dems in the House are certainly taking notice of how well the elections went for the “progressive” wing of their party.[iv]

Politics being what it is, would it surprise you if nothing happened in Congress for the next two years? Probably not.
Continue Reading Thinking About Leaving New York? Don’t Forget to Check Your Federal Tax Return

Priority Guidance Plan

Some folks eagerly await the release of a new album. Others camp outside of big box retailers to get the jump on holiday gifts. There are those who line up at box offices to purchase tickets for a concert that is months away. Then there are some who might as well be sitting on pins and needles after they’ve learned that their favorite tech company is about to announce the arrival of their latest “must-have”[i] gadget.
Continue Reading Sale to IDGT, Death of Grantor, Basis Step-Up: Treasury’s Priority Guidance & the Dems’ Loss of the House

Where is the Economy Heading?

According to the data released Friday by the Department of Labor, the U.S. economy added approximately 528,000 jobs in July, reducing the unemployment rate to 3.5 percent.[i] Although this figure was certainly better than what was expected by many economists, it seems to belie other signs of economic weakness.

Many states, for example, have reported recently that they are experiencing significant declines in estimated tax payments or that they expect declines in revenue from the withholding of personal income taxes.[ii] These developments are being attributed to the performance of the stock market[iii] and to the fact that wages have not kept in step with inflation.[iv]…
Continue Reading New York to Taxpayer: “Forget What the Feds Said, You’re a ‘Responsible Person’”

Summer Break?

After the last couple of weeks, I’m looking forward to Congress’s summer vacation. I’m pretty sure our elected representatives feel the same way, though it is unclear at this point when they will be heading to their respective homes – or wherever else it is they go[i] – to relax, recreate, and rejuvenate.

According to the Congressional Calendar, the Senate is scheduled to begin its break on August 6 and to return on September 6, while the House was supposed to have stopped work on July 30 and will be back in session on September 13.[ii]…
Continue Reading The Schumer-Manchin Proposal To “Eliminate” the Profits Interest

Economic Downturn?

The Federal Reserve’s Open Market Committee announced last week that it would raise the Fed’s baseline interest rate by 0.75 percentage points, the largest such increase since 1994.

The Fed’s move came in the wake of the Labor Department’s earlier announcement that the consumer price index (a measure of inflation) rose by 1 percent last month, and by 8.6 percent for the past 12 months, the highest rate of inflation since 1981. Following the release of the inflation figures, all the major domestic stock indices plummeted.

As a result of the foregoing, combined with the geopolitical uncertainty arising from the war in Ukraine, the continued supply chain issues (exacerbated by China’s ongoing difficulty with Covid), and other related factors, many economists and business owners are anticipating a recession.[i]…
Continue Reading Will An Economic Downturn Lead to An Increase in Tax-Related Whistleblowing?

A More Cautious Approach

Compared to the torrid pace of M&A transactions last year,[i] the current year seems rather pedestrian. That is not to say businesses are not being sold; they are. The purchase and sale of a business is one of the natural alternative paths in the evolution of the business.[ii]

However, the environment in which buyers and sellers are now considering their options and the manner in which they are approaching one another seem to have changed; one might say they are generally being more cautious, notwithstanding that the economy apparently remains strong by many measures.
Continue Reading The Earnout: Contingent Purchase Price or Compensation?