The Latest in Tax News: August 26 - September 8 Edition

Textbook Tax presents its weekly (past two weeks due to missing last week) tax news update. A quick read discussing various tax news, tax stories, and tax events trending in the United States during the week. The following tax topics cover the week of August 26, 2019 through September 8, 2019. The tax topics presented represent my favorites in tax news for the week. Please comment any tax news stories you found interesting for the recent week. Additionally, please email me or connect with me on social media for weekly tax news updates sent straight to you!

Related Posts -- Prior Weeks' Tax News
August 12 - August 18
August 5 - August 11
July 29 - August 4
July 22 - July 28

Tax News for August & September 2019

This week in tax news focuses on the the tax relationship between the U.S. and France, the Tesla tax breaks in China, Trump's tax returns, and the guilty plea of an IRS hacker.

Period: August 26 - September 8

Tax Topic: U.S. and France reach a 'pause' rather than a compromise on the digital tax

Why is it a tax story?

In August, French President Macron announced a 3% digital services tax targeted at big technology firms. Many U.S. tech companies, including Google, Amazon, Facebook, etc.) felt the digital tax unfairly targeted them. As a result, U.S. tech executives and President Trump threatened to retaliate by placing a tariff on French wine. During the G7 meeting, President Macron announced a French-United States compromise relating to the digital services tax. Now, reports indicate that the compromise is more so a pause. Here are the facts.

Tax Story Summary:

  • Macron announced France will reimburse companies the difference between its digital services tax plan and the tax plan from the OECD tax overhaul
  • The U.S. and France agreed to a 90-day reprieve to allow the countries to address the situation and assess the upcoming OECD global tax overhaul
  • President Trump and the U.S. has promised to hold off on retaliation for the 90-day period
  • While we have pause at the moment, a U.S. and France trade war may still occur in the future

Do you believe the U.S. and France will reach an agreement relating to the digital tax plan?

Tax Topic: China grants Tesla a tax break

Why is it a tax story?

Last week, Elon Musk visited China to discuss Tesla's planned expansion into China. Tesla is currently building a factory in China, which is its first factory outside the United States. The factory plant is located in Shanghai and will produce Tesla's Model 3 vehicles. The meeting went well, and Musk left China with positive news for Tesla. Here are the facts.

Tax Story Summary:

  • China announced Tesla will be exempt from a 10% purchase tax (a tax reserved for domestic electric car manufacturers)
  • In the China-U.S. trade war, China plans retaliation by placing a 25% tax on U.S. cars and an extra 10% tax for certain U.S. cars. Tesla will of course be exempt.
  • The announcement proved the strong relationship between Musk and Chinese officials

Can Musk and the Chinese government maintain a positive relationship?

Tax Topic: Deutsche Bank and Trump's tax returns

Why is it a tax story?

The never-ending story continues. Will Trump's tax returns be released to the public? For those still curious, the answer is still maybe. Deutsche Bank announced it holds some of Trump's tax returns. As a result, the House Financial Services and Intelligence committee issued subpoenas to the bank. The committee subpoenaed tax returns belonging to Trump, his kids, and his businesses. Here are the facts.

Tax Story Summary:

  • Deutsche Bank announced it has the tax returns requested in the subpoena
  • However, Trump has sued to block the bank from releasing his tax returns
  • Democrats believe the Deutsche bank route serves as the quickest way to access Trump's tax returns
  • Tax and legal experts expect the Democrats to succeed in obtaining the tax returns before the 2020 election
  • However, it remains uncertain if such documents will prove helpful to the political party
  • Deutsche bank has not released information relating to the returns, including the extent, the years, and other specifics

Will the public obtain Trump's tax records before the 2020 election?

Tax Topic: Student pleads guilty to attempting to hack the IRS to obtain Trump's tax return

Why is it a tax story?

Another Trump tax return news story! Anyone else getting tired of them? The latest involves a college student's attempt to hack the IRS. The obsession of the media over Trump's tax returns clearly impacts the people consuming the media content. As a result, Andrew Harris now faces potential jail time and a hefty fine. Here are the facts.

Tax Story Summary

  • Andrew Harris, a college student and mastermind behind an attempt to hack the IRS for Trump's tax returns, plead guilty to two misdemeanors of computer fraud
  • The official sentencing occurs on December 16, where Harris may face a two-year sentence and a $200,000 fine
  • The attempted hack occurred in November 2016
  • Harris attempted to hack the IRS through a financial aid site that automatically generates tax returns after imputing the financial aid government form
  • The Department of Education monitored all traffic on the financial aid site and alerted the IRS
  • Harris admitted to the hacking scheme after the IRS sent federal investigators to his college
What punishment should Harris face?

That is all for the most recent tax news, tax stories, and tax events.

Please share any and all comments below!