Tax Policy Outlook | 2025 & Beyond

House speaker is still representative Mike Johnson. He wanted a very, very tight vote. He won by one vote and that could give us a glimpse into the potential issues he's going to face down the road with having everyone vote with him. The house ways and means chair is going to stay. Representative Jason Smith, Senate majority leader is now Senator Thune. He takes over from Mitch McConnell, the Senate Finance Committee chair that's going to be Senate Mike Creo. And as I said, speaker Johnson has had some opposition and some challenges to his leadership and that we may see that result in a stumbling block to quick action on any tax policy despite what you may have been hearing in the news, it may not be as quickly as some people may be leading you to believe.

Jeff Kelson: Okay, thank you Sarah. So let's talk about campaign promises for a second. All right, you might've heard of a bunch. So the Trump van policy proposals, what has been discerned from that is they want to make the 20% deduction for qualified business income permanent. That's that 20% deduction you get on LLCs and S corporations if you meet certain conditions, they want to make the standard deduction increase permanent. The standard deductions currently doubled what it would be make TCJA individual tax rates and permanent. They've discussed that expand the child tax credit to a $5,000 universal credit and that's without an income limitation on that exempt temp income from taxation. We've heard that and how they administer that and whether that gets into the bill means to be seen, but also talked about exempting all social security benefits from taxation. Right now social security benefits can be taxed up to 85% depending on the taxpayer's adjusted gross income.

So this provision would exempt it all of the income from taxes and just bear in mind those taxes go to the social security coffers, not the where other income taxes go. So there has to be some pay fors in all this exempt overtime pay from taxation. We've heard that repeal the Affordable Care Act and the enhanced a CA premium tax credit and they also discussed decreasing the corporate tax rate from 21% to 20% except for US manufacturers where they have discussed reducing that corporate rate to 15%. So sort of a two tier rate, a high of 20%. So going down one percentage point and if you're American manufacturer it would be a six percentage point decrease. These were their talking points.

What happens eventually is up to Congress, but right now this is what we have distilled from all their policy proposals. Now let's get into they're also considering restricting the lower, I mentioned that to US manufacturers and there's been a lot of talk about tariffs on all US imports from China up to 60% considering the use of tariffs to pay for childcare options. So there is a childcare component and also looking at imposing universal 10% tariffs and all US imports from other countries other than China and in some cases imposing retaliatory tariffs of up to 200% on additional products if not produced in the us. Also repealing the Inflation reduction Act. That was the ACT that gave a lot of green energy credits otherwise known as the IRA act. So they're looking to repeal that and increasing excise taxes and large private endowments from universities. Right now universities pay if they have super large endowments paying slightly over 1% and I think they're talking about increasing that not only dramatically in the tax rate but also lowering the dollar level in which they will tax private endowments.

So I think it's over a billion dollars Now in the university's endowment, I think they're looking at broadening the base. So these are the talking points and the policy proposals that we've been hearing and the biggie they want to extend the TCJA, we will get into that. That is ready to sunset at the end of this year, the end of 2025. So this is the last year of the TCJA, unless Congress extends it or makes changes, but right now it's slated to end or terminate at the end of 2025. I mentioned they're going to repeal, they might be only repealing parts of the IRA we will see and whether they will keep their campaign promises. So that's the tax policy priorities.

Now there's a lot of confusion about what is actually sunsetting and what is permanent. Please appreciate that when TCJA was enacted, not all of the provisions were temporary. Many were permanent and the rule of thumb is most of the corporate provisions were permanent. Most of the individual and passed through entity provisions were temporary. Alright, so that's a good rule of thumb to go with and we'll take you through this. So these are the ones that are slated to expire the, excuse me, backwards. These are the ones that are permanent, I'm sorry, the r and d expense that is now amortizable over five years if it's domestic r and d or 15 years if it's foreign, is a permanent change. These are permanent provisions. It will not sunset at the end of this year. So that r and d capitalization, unless congress changes it despite the sunset of the TCJA is here here to stay.

The a hundred percent bonus appreciation began phasing out. So it was 80% and it went down 20% each year for 2024 at 60% bonus depreciation for 25 it'll be 40. For 26 it'll be 20. So this one is permanent, but it doesn't become fully permanent until 2027 because the tail of the 20% deduction in 2026 will be available. So another permanent change is the change of calculation for the 1 63 J limitation. That's the limitation that restricts interest expense deductible to 30% of ebit. It was ebitda, which is including depreciation amortization. Now it's just EBIT earnings before interest in tax. That's permanent. Folks, that is not going to sunset unless congress changes the law. That is a permanent change, even permanent as to the denominator, which is ebit, not ebitda. So that's either a further restriction on the interest expense deduction. There was a bill to extend and change these provisions.

It failed in two votes in 2024. All three of these provisions in those bills were slated to go back to their previous full de deductibility, but both votes in 2024 failed. Whether they get extended, we are going to get into that. But these are the permanent provisions and a lot of these as relate to businesses expiring or changing TCJA provisions. These are the ones that will sunset. Alright, so those are the ones that are not right now destined to sunset. These are, that's the double standard deduction for individuals that is at the end of 20 20, 25 will be halved. The elimination of the personal exemption, we'll go back the lowered marginal tax rates currently you see they go from 10 to 37 after 2025, they're going to be going from 10 to 39.6. So the highest individual tax rate will go back up to 39.6 on the sunset of TCJA and I'll favorite all salt deductions, right?

The cap to $10,000 for joint filers that is destined to the cap be removed. So all the salt, if nothing happens and we don't think something will happen, especially because this pays for a lot of this was a big pay for the salt deduction cap at 10,000. We've been hearing a few things that they might increase the deduction to 20,000 but keep the salt cap or 30,000 that remains to be seen. But right now, if nothing were to be done, that would go away and full deductibility would be restored. The increased child tax credit of 2000 upon the sunset, we'll go back down to 1000 and the increased A MT exemption and income levels of which that exemption phases out will be restored, subjecting more individuals to alternative minimum taxes and the casualty loss limitations would be restored. Right now it's pretty difficult to take a casualty loss deduction has to be a federal disaster area, but the old rules allowing it for all other types of casualty losses would be restored on the sunset of the TCJ. Bear in mind, all these provisions are in place in 24 and 25. We're talking about what would happen as of 1 1 26 unless something is done to extend TCJ, other ones because not all these get a lot of play. This is a biggie. I don't know how else to say this. TCJA doubled the estate tax exemption. That's the exemption you get excluding from taxes, estate taxes or gift taxes.

For individuals it was doubled and TCJA right now it's pretty high as a married couple I think Sarah goes up to 27 to 28 million. It would go down back down to 14.6 as a married couple, 7.3 per individual unless a change is made. So I believe it is

Sarah Adkisson: Currently 13.99 million per individual, which would make it almost 28 million per. This is getting pretty high. That one is, it'll be a real shock for some people

Jeff Kelson: And I think unless something happened soon, there's going to be a big rush to do a lot of estate planning in 2025. But yeah, that's a tremendous change. Also, another one is the 20% QBI is a deduction for passthrough entities like S-corps and LLCs where if you meet certain qualifications and your certain types of businesses, meaning a non consultant more, you get a 20% deduction. This is like a 20% reduction of your tax rate. So if the highest tax rate is 37% right now it's like 29.6 after the 20% deduction right now, that's destined to sunset. So that impacts a lot of pass throughs. It even impacts single member LLCs, sole proprietors, even Uber drivers get this, if they get a 10 99 that is destined to sunset the suspension of the miscellaneous itemized deduction. So right now there are no miscellaneous itemized deductions which are deductible.

Very, very limited. It would restore that back. So all the other deductions that went away at the end of 2017 would come back. Some of you might remember some of them like tax prep fees and other types of miscellaneous deductions would be available. Once again, the moving expense deduction. Once upon a time, taxpayers who move for change in jobs and other certain situations were able to deduct moving expenses or be reimbursed and not pay tax on them from the employer. That has been suspended. When TCJA sunsets that would come back, that would come back the mortgage interest deduction that's prior to TCJA. You could deduct mortgage interest on outstanding mortgages at 1 million. That was reduced to 7 50, 700 50,000 for it was grandfathered for the older mortgages, but newer mortgages were limited to duction only on 750,000 of outstanding mortgage principle. That would go back to a million. If TCJA sunsets without a change, the increased charitable deduction percentage, it was increased to 60% for cash contributions you could offset 60% of your A GI and once it's sunset it will go back down to 50%. Not a major change for some people, but still we talked about the casualty loss limitations that they would come back and a lot more taxpayers who are qualified for casualty loss deductions on fires and whatnot in their homes.

Right now it's in very limited circumstances. You can take a casualty loss limitation, the credit for paid family and medical leave would go away. And the last one I want to talk about, explain it a little bit, it has impacted many folks. We call it the four sixty one L disallowance, but it's what we call the excess business loss. Right now taxpayers can only deduct I think right for 2024 is about $575,000 of excess business losses. Those are losses from your business that can offset other income. It was limited, has been limited for the last few years except that's not going to expire or sunset at the end of 2025. Why? Because in previous acts they've used this disallowance to offset some budgetary negotiations to make other acts in the time balance. So that doesn't expire at the end of 2025. This one goes to expires in 2028, so that was extended three more years. So that does not get restored and allow taxpayers unlimited deductions of their business losses until 2029. So this one's going to be around three more years than the others. They've used this like I said, to balance other acts. So yeah,

Sarah Adkisson: I just wanted to quickly address, there's a really good question in the chat, what would happen with estate tax exemptions that have been ported over for couples? I think that's what Jack is trying to ask. So for those who don't know, if you die and you, your estate does not hit the full 14 million, you can do what's called porting over your remaining, it was called a residue to your surviving spouse and they can then use whatever was left over. It's often used as a technique. So the question for people has been what happens if one spouse died when the estate exemption was 14 million and maybe they did marital planning and all 14 million was essentially ported over to their spouse. What would happen with that? I believe that IRS has said that they would not do a clawback on that. The ported amount over would be remained and I suspect that that is just in terms of from an administrative perspective, it would be easier for 'em to do that. But that's a really good question.

Jeff Kelson: Yeah, and we're getting some questions in on would they change the RD rules retroactively to 2022, meaning that since 2022 taxpayers have been forced to capitalize and amortize their RD expenses? I don't think the discussion has been had about going back retroactively. It was for a while.

Sarah Adkisson: I think

Jeff Kelson: That ship has passed. Personally you would go back to 2022 to get a gazillion amended returns. I don't think that's, even if they did do something, it wouldn't be going back on doing amended returns. But it means to be seen what they're going to do with that. Whether they maybe have you start from 2025 that you can deduct it or they make you allow you some sort of catch up. We don't know. But right now I would just say bad repeating, it's a permanent change. So this is not going away unless something were to occur this year. And I would give you one other word of advice, don't go on the internet to look for what is expiring and not expiring. In my experience going on the internet and reading so many different materials about what's expiring at sunsetting and what's permanent, there's so much misinformation stay with us. We've dug into all the materials and spent a lot of time, but I've even questioned myself reading. I go, that's not how I read it. And then I go, okay, no, they're wrong. So please be very careful what you're reading on the internet. I mean be careful in general.

Sarah Adkisson: And I do just want to point out, somebody said that the bipartisan tax bill, the one that failed, yeah, it was retroactive to 2022, but the reasoning behind that of making it retroactive was because so many people filed for extensions filed for 2021 and 2022. So the thinking was okay, they could still do it retroactively to 2022 without creating as much amended returns for people. At this point that window has passed. So it would be a lot harder now to have it be retroactive to 2022.

Jeff Kelson: Yeah, much harder administrative. Yeah, that's why I'm saying that they do something with that. Maybe they might take into account what's been done before, but it would all be done on the current return. So no going back, I think that ship has sailed.

Sarah Adkisson: Yeah, I agree. There are currently bigger fish to fry

Jeff Kelson: And lastly other expiring is the guilty. The global intangible low tax income deduction will be reduced once TCJA sunsets. It's currently 50% deduction for the foreign income and go down only to a 37 point a five. So you lose a 12 point a half percent deduction on that fi. Foreign derived intangible income. This applies to C corporations, that's export. This is great deduction right now for C corporations that have export sales to get a 37.5% break on taxes on those sales. The sun setting of TCJA will not make that go away but reduce the benefit or the reduction of the tax from 37 and a half to 21.875. So F is not going to go away, but its impact will be lessened. The base erosion anti-abuse, the beat tax as we call it, will increase to 12.5%. That only applies to really large corporations and IRC section 9 54 C look throughs for controlled foreign corporations will also expire. That one will expire on December 31st, 2025. So these are the expiring international or adjusted international provisions that will be impacted upon the sunset unless Congress changes the rules, changes the law. So Sarah,

Sarah Adkisson: So I feel like this is what everyone is really here for, particularly judging by the questions that we're getting. So now it's time for us to do crystal ball gazing and speculate what we think is going to happen with the future of the TCJA. So one of the most important things to think about with the TCJ is it is really expensive. The congressional budget office is the governmental agency that produces estimates of revenue impacts for bills and some other things. The current cost estimate, and now I'll say this cost estimate I believe is from May of 2024. So this may be changed, but the current cost estimates to extend the TCGA for 10 years, so through 2034 would be $3.7 trillion to extend the individual provisions. 685 billion to extend business provisions and $189 billion just extending the gift tax and estate and gift tax provision on its own.

So the net estimated cost of that, and that does include interest in GDP impacts is $5.2 trillion. This is probably the biggest stumbling block to a full 10 year extension of the TCJA. That is a very, very large number and there are certainly members of Congress including members of the Republican party who will balk at that number. They will not necessarily be willing to pass a full tenure year bell that extends every single provision in the TCGI just wanted to share this. This is also the committee for a responsible federal budget. They're a nonpartisan organization that studies a lot of impacts of different things on the federal budget. Their intent is to convince Congress to pass a responsible budget as the name implies. But they have a very interesting and in my opinion, very fun tool where you can build your own TCGA extension and you can see how much each provision would cost individually, but they also agree that it would be 5.2 trillion to extend. So number is not, that's a generally very agreed upon number even among think tanks who may be doing their own different analysis than the CPO.

So anytime that there's a big tax bill, and this is true of the TCJ and it's going to be true of this one as well, there's the likelihood that they're going to need to pay for as part of PEGO rules in Congress, which I could talk about for like 20 minutes. But just to say generally speaking, most things need to be paid for. So every year the CBO o or every two years puts out suggestions on what Congress could pass to raise revenue for the US and reduce the debt. Some of these are pipe dreams that would never happen like introducing a consumption tax, like a VAT tax. I do not see that happening, but that would be a huge revenue raiser could raise anywhere between two to $3 trillion. Increasing payroll taxes, one to 2% is probably the easiest and most effective way to raise a significant amount of money. It would be about $1 trillion if you raised it 1% and about $2.25 trillion if you raised it 2%. The salt cap is a huge revenue raiser, the salt cap and that is why we will discuss it later. But that is partly why I believe that it will probably stick around in some way or another because it raises between 1.1 and $1.9 trillion. That is a huge revenue raiser and I can't see them necessarily getting rid of it.

A lot of the other ones, again, raising individual tax rates I think is going to be a non-starter. And admissions tax I also think is a non-starter. But some of the more, I guess obscure kind of thoughts, they may potentially be there. Taxing purchases, obscurities very low. I believe the amount that has been floated is 0.25% that there is a potential for something like that to end up in a bill. Previously in the TCGA advertising deductions were on the chopping block in the very first version of the TCGA. We could see that come back. So this is just to say there's, there's a whole menu of options for how they could pay for the TCJ if they want to go a traditional route, which is not to say all of them would be included. I obviously don't think they would all be included, but this is just a glimpse of what they may go congress may look at for ideas.

So people are asking what do we think is going to happen? So these provisions have strong bipartisan support and like we said at the very beginning, there may be a need for bipartisan support on some of these provisions in the house. If they lose one vote, this bill fails any bill, we would fail if they lose one or two votes. So it is possible that they're going to need support from Democrats to pass any bill. And so I think those provisions in particular are ones that we are absolutely going to see in a bill. So treatment of RD expenses not full, what we used to have, but the potential for allowing favorable expenses for domestic companies and even for that it would be domestic expenses, likely the

Jeff Kelson: Child. I think that one is on top of their mind. Make the domestic because look, they're trying to encourage RD and US companies and I think it gets a lot of support. It just can't pass because it gets caught up in other bills. But I think this is top of mind of a lot of congress is to restore the deduction somehow. And I agree with Sarah, I think they're going to really focus on American r and d rather than foreign RD

Sarah Adkisson: And it is possible they get enough pressure from companies in general that they want everything. It is hard to always know right now the most likely outcome is that they would allow more favorable expenses for the domestic expenses or domestic companies, but it is possible to get enough pressure from outside companies that it ends up full capitalization going away. It's full expensing back, you don't ever know. Definitely expanding the child tax credit. I see that happening probably sooner rather than later. It was such a big deal on the campaign trail for everyone who was campaigning. And I will say for Representative Smith, it is a very, very big boon for his district. So I could see that being put at any bill. The doubled standard deduction I think people have just gotten used to that is pretty popular. I would certainly see that staying in there, keeping it lowered individual tax rates.

The qualified business income deduction has also been very, very popular and has had bipartisan support making the paid FMLA credit permanent. I mostly put this in because there have been some bipartisan attempts to make it permanent and it is actually a very, very, well, we probably wouldn't think 66 billion is cheap, but in terms of a federal budget, it's a pretty cheap provision to put in. That has been, it looks good, it's low hanging fruit. There's been a lot of talk of using the tax code in some way to incentivize home building and home buying. We don't know exactly what that could look like. There've been credits floated, there's been grants floated, there've been proposed changes to low income housing tax credit. There was a bipartisan bill that was put in for the low income housing tax credit. It is had a lot of support. I think that one's probably sooner rather than later. It may end up in a larger tax bill is probably its best bet. The exemption of tax tips from taxation is another one that actually likely would not be particularly expensive, assuming that it continues to apply to the amount of tips that it is estimated to apply to. I think it would also be somewhere in maybe the tens of billions.

Jeff Kelson: I think they're looking to limit it to the hospitality industry too. Not

Sarah Adkisson: Yes,

Jeff Kelson: Which is the more the tips come from

Sarah Adkisson: And obviously at least the continuation of some tariffs. Tariffs in some form or another, particularly very targeted tariffs are used bi. So at least some form of those could be continued. Now tariffs, technically speaking under the constitution are supposed to be done by Congress, but there's an act section 262 of the Commerce Act. I think it was passed for Kennedy, I think it was during maybe the Cuban missile crisis that did grant the authority to the president to instead of having congressional approval to do tariffs, they can do it with the approval of the Secretary of Commerce on the basis of national security. National security tends to get a lot of different, so Congress there may not need to be by as much bipartisan support on some tariffs in order for them to continue or be placed. Sorry.

Jeff Kelson: Yeah, I think the QBI is also getting a lot of attention because a lot of the support in congress comes from a lot of small business owners or independent contractors and losing a 20% deduction. Very important to them and I think they're hearing a lot from constituents. I was hearing some people speak on Bloomberg on television, others that they're hearing from the constituents a lot about this QBI. So I feel that that's going to survive somehow.

Sarah Adkisson: Well and you consider the policy reasoning behind it was they were lowering the corporate rate to 21%. They didn't want to leave these small independent businesses just hanging out on win, paying the significantly higher rate. So when you take that into consideration, I certainly think that the policy reasoning is absolutely still

Jeff Kelson: There across that 21% corporate rate is permanent. If you let the 20% expire, then you get the disconnect between the pass throughs and the corporations, which at the time they was trying to make them equal saying reducing the corporate rate and this is how we reduce the pass rate. But yeah, that's why I think QBI is probably going to have a lot of support. The extension of,

Sarah Adkisson: So all of this is to say, and this is probably what we would do the most wild speculation, the idea of a trifecta is not going to necessarily be quite the, I use the word slam dunk care for extending the TCGA. The thinking has been very much like, oh, if they got a trifecta they'd be able to pass this very quickly. But as anybody who's been reading Bloomberg or maybe Punchable News or any of the other ones have seen, it's probably going to be a little harder than that. It just is. There's a lot of things that they might want to put in the budget bills. They're likely going to use the process that's known as reconciliation. I mean not likely they will in order to address these right now, I think as of two days ago, the idea was one bill as of last night or early this morning, president elect Trump said that he would still be open to the idea of a two budget bill alternative. I think what will happen is there will be one bill introduced with everything that they want in it and if it doesn't pass, they'll go to the idea of two bills. If that ends up happening, if we see two bills, my hunches hus, they'll try to address the individual provisions earlier and the corporate provisions later. That's just from what I've heard about conversations of wanting to get as many kind of individual campaign promises and those wins as early as possible in the administration.

In terms of the extension of the TCJA, it is I think also very, very likely that they will extend it three to four, maybe five years. I think they're going to kick it to the next administration to figure out once it expires again, and there's a couple of things that would be good for it and the main reason is that it would be much, much cheaper and it would be a lot more likely to get everyone on board to vote for it if it was significantly cheaper there, they will have two chances to do this. So typically reconciliation can only be used for budget reasons or revenue reasons or the debt ceiling, basically money. So they have the upcoming opportunity because they have the government funded through March of 2025. So up until March of 2025, they have this to pass another budget bill and then they have six months later fiscal year 2026 budget. So they'll have a second chance to pass a reconciliation bill. So that's why you're hearing about the potential for two bills is because they will have these two chances to go through a more expedited process. The downside of the expedited process is everyone has to be on the same page in the four corners have got to be filled in.

Jeff, I don't know if you have anything to add to that.

Jeff Kelson: I don't know. I just think that they're trying to get everything done early. From what I'm hearing, they want to have everything encompass in one big bill and not have it be carved up. But whether that is practical, I think it all depends on what tax provisions they go. If this child tax credits in the bill and other things that the Democrats seem to want, I think that would help. But the so CAP is a very contentious issue. It raises, as Sarah points out, a lot of it raises a lot of taxes and pay fors. So it's hard to imagine that the sole cap would be left to go back unlimited. Someone asked in one of the questions, Sarah, whether that includes the PTET workarounds, that's the pass through entity tax workarounds a lot of states have, if the numbers include that, I don't know if you know,

Sarah Adkisson: I do not believe that the number includes, that takes that into consideration. I had heard at one point, and I haven't really heard anything really recently about it, but the idea of potentially limiting the business's ability to also deduct salt expenses, but I don't know if that was just something that floated and was immediately shot down. So

Jeff Kelson: Many people have access to microphones, you hear talk and then people say, oh, they're going to get rid of the income taxes. First of all, if you ever get rid of the income tax, that would be a 10 year transition. At least what the country fuel.

Sarah Adkisson: And one thing to definitely keep in mind is the fact that there are two chambers. There's the house and there's the Senate and the House definitely wants to do one bill. The house knows that it has two seats. The house, Johnson and Smith want to get this done as fast as they can before somebody retires. Somebody dies. I mean, we've had multiple members of Congress die in the past couple of years. They want to make sure that they get it done while they have the majority. The Senate has a much healthier Republican majority, they have more cushion there. So they are definitely less, they have less pressure to get everything through to door as quickly as possible. So that's another thing to keep in mind. And also there are two schools of thought even within the Republican party about the tax bills. There are some people who are absolutely fine with the idea of using tariffs to be considered to pay for, I don't know, to my knowledge if tariffs have ever been used as a payment before, I don't know how CBO would even score that. I don't know if it's actually a feasible idea. It's entirely possible that CBO would score it, parliamentarian would accept it. Who now is on that one? But there's certainly a difference of opinion among even the Republican conference on the approach to the bill and the approach to paying for it.

Jeff Kelson: Yeah, if I were gaming this, I think the focus is probably on things like we discussed standard deduction doubling, especially if they keep some sort of salt cap because people aren't getting the state and local deduction. So the reason they doubled the standard deduction was to compensate some people that were losing their real estate tax and state local tax deductions. So I think if they keep some sort of salt cap, even if they raise it from 10 to 20 or 30, that they might keep the double deduction. I keep mentioning the QBI because I think with the corporate tax rate being lowered, if you let the QBI expire, that would be a disconnect between the pass throughs and the larger companies C corps. The estate one I think is open to, I'm not as certain about that, but it could very well continue to be doubled. But I think that has a harder climb. Perhaps that's, and the RD expense I think is got a lot of bipartisan support.

Sarah Adkisson: So we actually had a couple of questions that I want to make sure that we talked about. Moved onto the next one. A couple people have asked about the future of bonus. I think some form of bonus has bipartisan support. I don't suspect that a hundred percent bonus would have bipartisan support, but if we look, I mean historically bonus expires and comes back and expires and comes back or gets extended. So I think looking from a historical perspective bonus in some form or another will likely, I can't see it being included in a bill at some point and probably passing it is like a zombie. It just keeps coming back.

Jeff Kelson: By the way, there's still a section 1 79 deduction, so you can't get some immediate write offs of a million dollars. So they do. It's still available, but Right. I agree with you, sir.

Sarah Adkisson: Yeah, there was another person who actually asked about qualified opportunity zones. That's actually a really interesting question because I haven't really seen anything about it, but there have been some bipartisan bells introduced. I think there was one introduced at the end of, it was introduced at the end of last year. It may have been in October. So there is some bipartisan support to extend it, but I don't know what that level of urgency or enthusiasm is for that. But it's certainly something that could end up given the bipartisan bill that has been introduced. I just want to make sure that, I thought that was a very interesting question and something that people haven't really asked.

Jeff Kelson: There's a question on the BOI, the beneficial ownership reporting that has been sort of a rollercoaster. The Corporate Transparency Act where businesses were required to report all their beneficial owners by what? 1 1 25 which got extended and then it got ruined by Christmas, right at the last week of the year. There was a lot of CLA to Fifth Circuit said, no, you have to file it now, we'll send it to January 13th. And then they did an about face and said no, everything's on hold. So right now that is in front of the Supreme Court.

Sarah Adkisson: Yes.

Jeff Kelson: So

Sarah Adkisson: The plaintiffs have until January 10th to respond to the government's request that the Supreme Court stay the injunction and staying an injunction basically means not allowing the injunction to go into effect. I believe that. So it's in front of Justice Alito. He could just say yes or no either. Yeah, the injunction stays in place or no, we'll stay the injunction for the government. They also, this is interesting, and I think I actually just noticed this, they two days ago, they actually also requested that essentially the Supreme Court leapfrog the Fifth Circuit. They asked that the request also be treated as a request for cert. So for the Supreme Court to take it up, the constitutional question, I don't think that's done very frequently. I don't think leap fragging court is typically done, but it may be that the Supreme Courts decides that this is a pressing constitutional question and they answer it. But I can't wait for them to rule one way or the other.

Jeff Kelson: Stay tuned. So right now FinCEN is saying you can hold off for now. We probably know more in a week or so. Yeah, this has been very interesting. I don't think I've seen quite anything like that in my career. The topsy-turvy stops and starts. So it's been very interesting.

Sarah Adkisson: We've had a couple people asking when will the bill be final? When will we know it's in the bill? We won't know until it's fully published, until they release it. Leaks will start coming out probably soon. I would expect leaks will be coming out soon on what they're writing in a bill, what's actually ending up in it. But we'll find out soon hopefully. So apparently we only have five minutes left. I do really want to quickly cover just briefly, we do not have to go into everything, but I do want to cover very quickly some regulatory updates and considerations with the incoming administration. So for basically with the new administration, you're going to have new regulatory heads. So new Secretary of the Treasury, a new Iris commissioner. Obviously these are positions that need to be sent and confirmed. So we know who the administration has picked, but obviously we don't know that these are going to be necessarily who ends up with those positions.

I think the treasury pick will probably pass fine. The IRS Commissioner trick pick was a little bit more of a surprise for some people. So I don't know how his confirmation hearings will go. He may sail through, who knows no matter what, there's going to be the potential for I think significantly less regulations. That's been a big campaign promise. So even though this isn't necessarily tax related in and of itself, there's so many regulations with tax. So I think that we'll see less regulations in general coming out. There is the chance that proposed regulations will be withdrawn by the new administration and there's also the Congressional Review Act. So a new congress can essentially revoke regulations passed within in the past 60 legislative days. That sounds like not a lot of time, but it's legislative days, which is like dog ears, sorry. So they will potentially be able to revoke some regulations that have already been passed. So one of the ones that I had immediately thought of was potentially some of the digital asset regulations. There was one that just came out on decentralized exchanges and of course lo Bright is going to open the door for more challenges to regulations and more challenges to be won by taxpayers.

Jeff Kelson: That was a rebuke of Chevron case.

Sarah Adkisson: I'm not going to go through the whole bright slides that I have,

Jeff Kelson: But

Sarah Adkisson: Suffice to say Lober Bright overturned a 40-year-old case that required courts to give agents agencies deference in how they interpreted a rule or wrote a regulation. And that is now no longer the law of the land. So lo Bri is going to mean that there's going to be so many more challenges to regulations and likely more wins for taxpayers or so I just wanted to make sure that we hit that because even though it's not policy necessarily, it will have an impact on a lot of people. I think. So we have any other questions that we wanted to address?

Jeff Kelson: Yeah, people are asking about the employee retention credit backlog. One of the bills in 24 was cutting off the time for filing ER Cs. Obviously no bill got passed in tax in 24. I think we're stuck with where we are. The IRS is looking at those claims starting to come out from under. There are disallowing a lot. They are auditing a bunch, so remains to be seen, but we are starting to see some movement in payments on the ones that they feel are qualifying. Someone asked about 1 63 J the prognosis on that. I don't think there's a chance that they could make changes to 1 63 J to make it more beneficial to taxpayers. But I think there is sort of this prejudice against the leverage companies getting such high interest deductions. It might have a higher hill to climb than say the RD expense, which is a lot of bipartisan support. Bonus depreciation, QBI so means to be seen on that. I don't have a crystal ball on the 1 63 J. It is a tough provision though.

Sarah Adkisson: There've been a couple questions also about how much it would cost for 1 64, 1 63 J to come back. I don't know right off the top of my head, but I know that it's nowhere near as expensive as SA allowing the salt cap to expire. I believe each one of them is somewhere in either the high tens of billions or low hundreds of billions. So not significantly. I think bonus is the most expensive if I'm recalling correctly. See, I should have written down how much everything was going to cost, but I wouldn't say it's substantially a lot, but it does. Everything adds on to each other. So it kind of depends on who lobbies the best. Probably

Jeff Kelson: Last question was any news in the 2020 amended returns that have now passed statute for the employee retention credit? As you know, you couldn't take deductions to the extent you apply for the credit. If you did it in 2020, the statute is closed. There's no way to amend that return unless there was some sort of lost carryover from it. So even if you did file an amended 2020 return and paid the IRS, they send it back to you, statutes closed. Now what position does that put the taxpayer in means to be seen? But yeah, 2021 still open for at least to April of this year. So ERC is a whole different kettle of fish we don't want to get into anymore right now. Sarah, any parting words from your perspective?

Sarah Adkisson: It's going to be really interesting. I would say the next 90 days are going to be very busy. For anybody who's following this who wants to stay up and read legislation, it's going to be a very busy on top of tax season.

Jeff Kelson: And I would say pay attention to trusted sites. Again, I am just amazed at the misinformation on the net. I mean I shouldn't, right? But we shouldn't on taxes. People just don't get it. They write incorrect analysis. Say it's the trusted sites, stay with us, use

Sarah Adkisson: GPT just to generate

Jeff Kelson: Content hallucinates and says whatever. So stay with Trus aside, stay with us. We'll keep you abreast when anything changes and well thank you for your time today. We know this is sort of interesting times and we're all going to, it's going to be interesting year to see what the tax changes will result. Thank you.

^{Transcribed by Rev.com AI}