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Taxation & Representation, April 26, 2022 | Brownstein Hyatt Farber Schreck

IRS Scams

Taxation & Representation, April 26, 2022 | Brownstein Hyatt Farber Schreck


Tax Tidbit

SCOTUS Denies New York v. Yellen. The U.S. Supreme Court announced on Tax Day it would not hear a constitutional challenge to the $10,000 deduction limit on state and local taxes (SALT) enacted under the Tax Cuts and Jobs Act (P.L.115-97). The Supreme Court declined to provide reasoning for not hearing the challenge.
New York, Connecticut, Maryland and New Jersey argued the SALT deduction cap was unconstitutional since it interfered with their authority to collect property and income taxes.
The Second Circuit previously ruled against the states, finding that Congress had the constitutional authority to limit the SALT deduction. In its decision, the Second Circuit said “the SALT deduction cap is not unlike the countless federal laws whose benefits and burdens are unevenly distributed across the country and among the several States.”
New York, New Jersey and Connecticut are hoping for a different outcome in another pending case. In that one, the states challenged Internal Revenue Service (IRS) regulations that prevent states from creating SALT deduction cap workarounds. That case, New Jersey v. Mnuchin, is currently before a New York federal court.

Legislative Lowdown

Rettig, Collins Testify Before House Oversight Panel. On Thursday, the House Oversight and Reform Subcommittee on Government Operations held a hearing entitled, “IRS: Is It Ready?”, during which IRS Commissioner Charles Rettig and National Taxpayer Advocate Erin Collins testified….

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