President Joe Biden released his annual budget Thursday, outlining his policy priorities for the year ahead. Biden's FY 2024 budget proposes to increase taxes for corporations and individuals with incomes above $400,000 as part of a plan intended to reduce federal budget deficits. Specifically, the budget proposes to increase the US corporate income tax rate from 21% to 28%, and to raise the tax rate on the foreign earnings of US multinational corporations from 10.5% to 21% while adopting an undertaxed profits rule.

For individuals, the budget proposes measures including increasing the top individual ordinary income tax rate from 37% to 39.6%, taxing capital gains income for high earners at ordinary rates, and imposing a 25% "minimum income tax on the wealthiest taxpayers." The budget also calls for higher Medicare health insurance taxes for individuals with incomes above $400,000 as part of a plan that seeks to avert the projected insolvency by 2028 of the Medicare hospital insurance trust fund.

President Biden's proposal seeks to increase revenue and reduce spending in order to put the federal government on a more sustainable fiscal path. However, given Republican control of the House of Representatives, it is unlikely that these proposals will be enacted without bipartisan support.

Question:  why not reduce wasteful government spending instead of increasing taxes?

The IRS released IR-2023-33 (the “Notice”) providing a tax relief for taxpayers who live in disaster areas in Alabama, California, and Georgia postponing the due date of 2022 income tax returns for individuals, various businesses and tax-exempt entities until October 16, 2023.  The relief also includes postponing the due of the fourth quart of 2022 estimated tax payment, the first through third quarter of 2023 estimated tax payments, and quarterly payroll and excise tax returns normally due on January 31, April 30, and July 31 until October 16, 2023.

The IRS automatically provides filing and penalty relief to any taxpayer in the disaster area.  If an affected taxpayer receives a late filing or late payment penalty notice from the IRS for the related returns and payments, the taxpayer can call the number on the Notice to have the penalty abated.

Additionally, individuals and businesses in a federally declared area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year of loss or 2022 tax return.

The official announcement of the IRS tax relief for disaster are taxpayer can be bound in the below link:

IRS: May 15 tax deadline extended to Oct. 16 for disaster area taxpayers in California, Alabama and Georgia | Internal Revenue Service

Taxpayers who live in the affected areas should check the Notice and consult with a tax advisor for more information.

The Superfund excise tax is imposed by section 4661 of the Internal Revenue Code (IRC) on the sale or use of certain chemicals and petroleum products. The tax is designed to fund the cleanup of hazardous waste sites under the Superfund program.

If a US company has a maquiladora subsidiary (a manufacturing operation in Mexico that is owned and operated by a foreign company), it may still be subject to the Superfund excise tax if it produces or uses certain chemicals and petroleum products that are subject to the tax.

Section 4672 of the IRC provides that the Superfund excise tax is imposed on the sale or use of taxable chemicals and petroleum products by the manufacturer, producer, or importer of the products. Therefore, if the US company or its maquiladora subsidiary is the manufacturer, producer, or importer of the taxable chemicals and petroleum products, it may be subject to the Superfund excise tax.

It's important to note that the Superfund excise tax applies to specific chemicals and petroleum products that are listed in the IRC. The list includes a range of chemicals and petroleum products, such as crude oil, gasoline, diesel fuel, and certain chemicals used in manufacturing processes.

If you believe your company may be subject to the Superfund excise tax, it's best to consult with a tax professional who can provide guidance specific to your situation.

Under revised IRC Section 174, R&E expenses incurred in tax years beginning after December 31, 2021 must be capitalized and amortized over 5 years (or 15 years if the research is performed outside of the United States).  A taxpayer’s change in treatment of R&E expenses is a change in method of accounting requiring the Commissioner’s consent.  However, Rev. Proc. 2023-8 provides automatic consent for the change and a streamlined procedure if the accounting method change is made for the first effective year.  Taxpayers making a change for the tax year following the first effective year will not be entitled to the streamlined procedure and an audit protection is not provided.

Taxpayers making the change in the first effective tax year must use cut-off method to apply the new method and provide statement providing required information per the Rev. Proc. 2023-8, including:

(A) the name and employer identification number or social security number, as applicable, of the applicant that has paid or incurred specified research or experimental expenditures after December 31, 2021;

(B) the beginning and ending dates of the first taxable year in which the change to the required § 174 method takes effect for the applicant (year of change);

(C) the designated automatic accounting method change number for this change (DCN 265);

(D) a description of the type of expenditures included as specified research or experimental expenditures;

(E) the amount of specified research or experimental expenditures paid or incurred by the applicant during the year of change; and

(F) a declaration that the applicant is changing the method of accounting for specified research or experimental expenditures to capitalize such expenditures to a specified research or experimental capital account, and amortize such amount over either a 5-year period for domestic research or 15-year period for foreign research (as applicable) beginning with the mid-point of the taxable year in which such expenditures are paid or incurred in accordance with the method permitted under § 174 for the year of change. Also, the declaration must state that the applicant is making the change on a cut-off basis.