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    Tax Provisions in the Infrastructure Investment and Jobs Act

    On November 5, the House passed the bipartisan Infrastructure Investment and Jobs Act, H.R. 3684, by a vote of 228-206, with the support of 13 Republicans. The Senate passed the bill in August 2021, also with bipartisan support. One way the Democrats got Republican buy-in is that early on, they substituted tax increases with compliance measures to fund the bill, although the final Act includes a few revenue-raising and tax-related changes, described below. 

    Early Termination of Employee Retention Credit

    The Employee Retention Tax Credit is a payroll tax credit created to help businesses offset the costs of keeping employees on payroll and employer-sponsored health insurance during the pandemic. The provision was initially implemented by the CARES Act from March 13, 2020, through December 31, 2020, for employers that were subject to governmental and public health COVID-19 restrictions and had experienced a significant decline in revenue. The credit was later extended through December 30, 2021.  

    The credit now expires after September 30, 2021, except for recovery startup businesses that can take the credit for the last quarter of 2021. Recovery startup businesses need only meet the requirements that they started operations after February 15, 2020 and had annual gross receipts of less than $1 million. 

    Cryptocurrency Reporting

    The provision requires brokers responsible for transfers of digital assets, such as a sale on behalf of someone else, to issue a Form 1099-B to their customers. This is the same type of reporting currently required for traditional assets like stocks and bonds. 

    The provision updates the definition of broker to reflect the realities of how digital assets are acquired and traded and makes clear that broker-to-broker reporting applies to all transfers of covered securities, including digital assets. Also, digital assets are added to the current rules requiring businesses to report cash payments over $10,000.  

    The Treasury Department has said informally that it will not target non-brokers, such as miners and software developers, and that it is studying many issues regarding cryptoassets.  

    The provision applies to returns required to be filed and statements required to be furnished after December 31, 2023. 

    Extension of Time to File Tax Court Petitions

    This change is taxpayer-friendly. Taxpayers usually have 90 days to file a petition with the Tax Court once they receive a statutory notice of deficiency. The Court is very strict with its deadlines. The Tax Court is the only trial court that allows the taxpayer to bring a case without paying the entire liability first, so missing the petition deadline is serious.  

    The new provision provides a tolling period for the time for filing a Tax Court petition when the court is inaccessible and provides taxpayers an additional 14 days to file after the Tax Court reopens after a period of inaccessibility. The provision was included because, in recent history, the Tax Court has been inaccessible and often unable to accept mail for extended periods of time due to weather, lapses in appropriations and the COVID-19 pandemic. 

    Exclusion of Capital Contributions to a Public Utilities Corporation

    This provision allows contributions by governmental entities towards critical water and wastewater infrastructure to be treated as contributions to the capital of a public utilities corporation and excludable from a corporation’s income.  

    Funding Standards for Defined Benefit Plans  

    Defined benefit plans are subject to minimum funding rules that require the sponsoring employer to make a required level of contribution for each plan year to fund benefits. Under current law, the amount of the required contribution can vary year to year with interest rate fluctuations. The Act extends until 2030 rules that stabilize funding obligations and prevent them from fluctuating excessively.  

    Tax Deadlines in Federally-Declared Disaster Areas  

    The Act extends some tax filing deadlines in the areas of federally-declared disasters and where there are significant fires. 

    Taxpayers Serving in Combat Zone or Contingency Operation

    The provision clarifies that all Tax Court petitions, not just deficiency petitions, receive the postponement for taxpayers serving in combat zones or contingency operations. Also, the time for the government to file an erroneous refund suit against a taxpayer is postponed.  

    Motor Vehicle Per-Mile User Fee Pilot Program

    This is a sleeper provision that could lead to a higher alternative to the federal gas tax in the future. The provision establishes a pilot program to study per-mile user fees for passenger motor vehicles, light trucks, and medium- and heavy-duty trucks. The amounts may vary between vehicle types and weight classes to reflect estimated impacts on infrastructure, safety, congestion, the environment or other related social impacts. This type of program would impose user fees on electric vehicles, which now escape the gas tax.  

    Private Activity Bonds for Broadband and Carbon Dioxide Capture

    The Act allows the use of private activity bonds for broadband projects and carbon dioxide capture facilities.   

    Superfund Excise Tax on Chemical Manufacturing and Imports

    The Act reinstates Superfund fees on chemicals and hazardous wastes beginning on July 1, 2022, and sunsetting on December 31, 2031.

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