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TAX TAKE: Senate Taxwriters Have a Few Questions

Tax Alert

While the House of Representatives sits idle as Republicans figure out who to elect as their next Speaker, Senate taxwriters are poring over the written responses to questions for the record (QFRs) posed by senators to the president's nominee for IRS Chief Counsel, Marjorie Rollinson. 

Last month, she was considered in the Senate Finance Committee, where she fielded questions on IRS policy and procedures in person. The post-hearing QFRs are important, not so much for the replies, which are usually broad and non-committal, but rather for the questions themselves, as they provide insight into Senate taxwriters' concerns. 

The QFRs cover a range of topics, including the Organisation for Economic Cooperation and Development's (OECD) global minimum tax, the economic substance doctrine, the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, conservation easements, IRS enforcement priorities, the Foreign Account Tax Compliance Act (FATCA), Germany's extraterritorial withholding tax, foreign tax credit regulations, Superfund taxes, and more.

What's really on the minds of Senate Finance Committee members? There's too much to fully discuss here, but some highlights include: 

  • Senators Steve Daines (R-MT), Todd Young (R-IN), and Charles Grassey (R-IA) tried to pin down Rollinson on the OECD's work to finalize a global minimum tax. While noting the need to get up to speed on the OECD talks, Rollinson conceded that there are unknown impacts on U.S. companies because so many "open issues" have yet to be resolved. Asked about the potential negative impact on American research and development (R&D), she told Sen. Young, "From what I understand, R&D credits seem to be generally treated as non-refundable at this time." She offered to meet to discuss the issue further.
  • Pressed for better FATCA compliance enforcement by Sen. Sheldon Whitehouse (D-RI), Rollinson acknowledged that FATCA is "critical for cracking down on offshore evasion and supporting a fair tax system" and pledged "to implement any needed improvements."
  • Sen. Bill Cassidy (R-LA) asked about tax credits and refund claims since the reinstatement of the Superfund tax, as well as the application of the tax credit for semiconductor manufacturing under the CHIPS Act.
  • Sen. Jim Lankford (R-OK) and others asked about the recent decision to remove most tax regulations from review by the Office of Information Regulatory Analysis. 

On these and most other issues, Rollinson demurred from taking a firm position, citing her need to learn more about the issues and policies currently under debate at the IRS and the Treasury Department. 

It shouldn't take long. Rollinson previously served at IRS as Associate Chief Counsel (International), so she is well-positioned to hit the ground running if confirmed.

The Senate Finance Committee may vote soon on Rollinson's nomination, after which a vote by the full Senate will be  needed to confirm her to the position. Until then, it is worth reviewing these QFRs for any issues impacting your organization, especially from the administration's perspective. #TaxTake

In the News

Jorge commented in Bloomberg Tax on what the next Speaker of the House could mean for the passage of a spending bill and a bipartisan tax package.

Upcoming Speaking Engagements and Events

On October 30, Loren will speak at the IBA Annual Conference on a panel titled, "How Do the OECD and the U.N. Address International Tax Issues (Past, Present, and Future)?"

Also on October 30, Marc will present a tax legislative outlook at the 58th Annual Southern Federal Tax Institute.

Marc will present at the 2023 Blue Cross Blue Shield National Tax Conference in Austin on November 29.

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