Cryptocurrency—referred to by the IRS as “virtual currency”—has seen rapid growth in both investing and financial transactions. While the IRS and other federal agencies are increasingly focused on regulation and oversight, guidance in several areas remains unclear.

This article outlines U.S. federal tax implications for both individuals and businesses engaged in cryptocurrency activity, including those involved in foreign crypto-related investments. It also highlights emerging information reporting requirements.

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Taxation of Cryptocurrency

According to IRS Notice 2014-21, virtual currency is classified as “property,” not currency, for federal tax purposes. This means traditional tax rules for property apply.

Common Taxable Events Include:

• Mining or staking cryptocurrency

• Receiving crypto as payment for goods or services

• Using crypto to buy goods or services

• Trading one crypto for another

• Converting crypto to/from fiat currency (e.g., U.S. dollars)

General Tax Rules:

• Crypto received through mining, staking, or as compensation is taxable income measured by its fair market value (FMV) in USD at the time received.

• When using crypto for purchases or exchanging it, capital gain/loss is recognized based on the difference between FMV at the time of the transaction and the taxpayer’s basis.

• Most individuals report capital gains/losses on Form 8949. Dealers or those in the business may report ordinary income.

• Purchasing crypto with fiat does not trigger a tax event.

Example:

• You buy 1 BTC for $30,000.

• Later, you trade it for another crypto when BTC is worth $35,000.

• You recognize a $5,000 capital gain.

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International Tax Considerations

1. Controlled Foreign Corporations (CFCs)

U.S. shareholders of CFCs may be taxed on “Subpart F income,” which includes foreign personal holding company income (FPHCI). Gains from trading crypto may be categorized as FPHCI unless exemptions apply.

2. Passive Foreign Investment Companies (PFICs)

Foreign funds or companies dealing heavily in crypto could be PFICs, triggering adverse U.S. tax consequences and reporting requirements for investors.

3. Foreign Currency Gains

As of now, the IRS does not consider cryptocurrency a foreign currency under Section 988, meaning crypto transactions do not generate foreign currency gains or losses—though this could change.

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Other Tax Considerations

• Capital losses from crypto may offset other capital gains.

• Donating appreciated crypto can yield a fair market value deduction if held over a year.

• Wash sale rules currently may not apply to crypto, but this is a gray area—consult a tax advisor before relying on that position.

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Reporting Requirements

Inconsistent Reporting by Exchanges:

• Some issue Form 1099-B

• Others use Form 1099-K

• Some issue no forms at all

Due to this inconsistency, the IRS has issued John Doe summonses to crypto platforms since 2016 to obtain user data.

Form 1040 Requirement:

Since 2020, all taxpayers must answer yes or no on Form 1040 if they engaged in any virtual currency transaction during the year.

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Upcoming Reporting Proposals

The Infrastructure Investment and Jobs Act, passed by the Senate in August 2021, proposes:

• New broker reporting rules for digital asset transactions

• Mandatory reporting of crypto payments over $10,000

• Effective for filings after December 31, 2023

Additionally, the Biden Administration has proposed $80 billion in IRS funding to strengthen crypto-related enforcement. Higher-income individuals (over $400,000/year) are expected to face increased audit scrutiny.

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Bottom Line:
Cryptocurrency taxation is evolving quickly. Investors and businesses should maintain detailed records, consult tax advisors, and prepare for stricter reporting rules in the coming years.

The Treasury Department’s Green Book outlines proposals by the Biden Administration to raise federal tax rates for corporations and high-income individuals. If enacted, these changes would generally take effect for tax years beginning after December 31, 2021.

Key Proposed Changes:

• Corporate tax rate increase: from 21% to 28%

• GILTI (Global Intangible Low-Taxed Income) effective rate: from 10.5% to 21%

• Top marginal individual tax rate: from 37% to 39.6%

• Long-term capital gains rate for high earners: from 20% to 39.6% (or 43.4% with the Net Investment Income Tax)

⚠️ Note: The increase in long-term capital gains rate is proposed to apply retroactively to gains recognized after April 28, 2021.

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Why Timing Matters

If tax rates increase, strategic timing of income recognition and deductions can lead to permanent tax savings. The idea is simple:

• Accelerate income into lower-tax years

• Defer deductions into higher-tax years

This approach can reduce overall tax liability for corporations and individuals—including flow-through income from partnerships, LLCs, and S corporations.

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Income Acceleration Strategies

• Advance Payments:
  Switch to the full-inclusion method to recognize income when received, not deferred.

• Installment Sales:
  Elect out of the installment method to recognize the full gain in the current year.

• Sale-Leaseback Transactions:
  Recognize gain now and take future deductions on lease payments (if not recharacterized as financing).

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Deferring Deductions

For accrual-method taxpayers, consider delaying certain payments so deductions fall into a higher-rate year:

• Accrued Liabilities:
  Items like warranties or rebates are deductible when paid.

• Accrued Compensation:
  Bonuses are deductible when paid within 2.5 months of year-end; delay further to push deductions forward.

• Related-Party Payments:
  Interest or fees owed to related cash-method or foreign entities are only deductible when paid or recognized by the recipient.

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Additional Tactics for Future Deductions

• Expense Capitalization:
  Capitalize and amortize qualifying costs (e.g., R&E expenses, software development, patents).

• Depreciation:
  Elect out of bonus depreciation or Section 179 to spread deductions over asset life.

Note: Starting in 2022, U.S. and non-U.S. R&E expenses must be capitalized over 5 and 15 years, respectively.

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Net Operating Loss (NOL) Preservation

NOLs will be more valuable under a higher corporate rate. But beware of triggering a Section 382 ownership change, which can limit NOL utilization. This can occur through:

• Stock redemptions

• Equity financing

• Transfers among 5% shareholders

Monitor shareholder activity to protect NOLs and strategically time their use for maximum benefit.

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When Deferring Income Makes Sense

Not all taxpayers benefit from accelerating income. Some may:

• Qualify for CARES Act NOL carrybacks (at 35% or 39.6% rates)

• Be pass-through owners who can offset income in earlier years

• Expect a drop in future income, making deferred income less costly

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Act Now: Review, Model, and Execute

Whether or not tax rates rise, the time to plan is now. Taxpayers should:

• Model the impact of timing shifts

• Consult with advisors on method changes or elections

• Make necessary moves before year-end or by extended filing deadlines

On August 25, Senate Finance Committee Chair Ron Wyden (D-Ore), along with Senators Sherrod Brown (D-Ohio) and Mark Warner (D-Va), released a draft proposal aimed at overhauling the U.S. international tax system.

This new proposal builds on the previously introduced Overhauling International Taxation framework released in April and adds more details about significant potential changes to international tax provisions enacted under the 2017 Tax Cuts and Jobs Act (TCJA). Key provisions addressed include:

• Global Intangible Low-Taxed Income (GILTI)

• Base Erosion and Anti-Abuse Tax (BEAT)

• Foreign Derived Intangible Income (FDII)

• Foreign Tax Credit (FTC) rules

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Key Differences: Wyden Proposal vs. Biden Administration’s Green Book

Below is a summary of how the Wyden plan compares to the Biden Administration’s tax proposals:

Global Intangible Low-Taxed Income (GILTI)

Nearly three years after the U.S. Supreme Court’s Wayfair decision, 45 states have enacted economic nexus rules, requiring remote sellers to register and remit sales tax if they meet certain thresholds (e.g., $100,000 in sales or 200 transactions per year). Many inbound companies are now realizing that they have unknowingly triggered nexus and failed to collect sales tax in states where they do business.

In addition to economic nexus, some companies may have already created physical nexus before Wayfair by:

• Employing personnel or agents in the U.S.

• Soliciting sales at tradeshows

• Storing inventory in U.S. warehouses (e.g., Fulfillment by Amazon)

Failing to comply with these obligations can lead to significant liabilities and penalties.

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Why Use a Voluntary Disclosure Agreement (VDA)?

Before registering and collecting sales tax going forward, companies should assess past exposure and consider Voluntary Disclosure Agreements (VDAs) to limit liability. VDAs are designed to:

• Encourage compliance

• Limit retroactive tax liability

• Reduce or abate penalties and interest

Most states offer look-back periods of 3–4 years and allow anonymous applications—though some (e.g., California, Illinois, New York) require identity disclosure upfront.

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VDA Disqualification Triggers

A company may be ineligible for a VDA if:

• The Department of Revenue (DOR) has already contacted the company

• The company is already registered for the tax in question

• The company collected but failed to remit the tax

• In some states, if one company in a group receives a nexus questionnaire, it can disqualify the entire group

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Information Required in a VDA

The disclosure typically includes:

• Company background (state of incorporation, products, etc.)

• Nexus creation date and how nexus was established

• Sales volume and estimated liability

• Whether sales tax was collected but not remitted

• Corporate registration status with the state

States may audit disclosures and void VDAs for misstatements or omissions.

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Additional Considerations for Inbound Companies

• FEIN Requirement: Companies without a Federal Employer Identification Number (FEIN) usually cannot register with a DOR, which may hinder VDA completion.

• Other Tax Obligations: Some states (e.g., PA, OH, TX, WA) may require income or gross receipts tax filings in addition to sales tax.

• Deadline Sensitivity: VDAs are often time-sensitive, with tight deadlines (30 days). Missing one may void the agreement and expose the taxpayer.

• No Refunds Within Look-Back Period: Most VDAs don’t allow amended returns or refunds for overpaid taxes in prior years—even if nexus didn’t exist or the product was tax-exempt.

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Why Act Now?

With post-pandemic revenue shortfalls and aggressive enforcement, states are increasingly targeting non-compliant companies. Companies operating in multiple states may need to pursue several VDAs simultaneously.

Success depends on:

• Deep familiarity with each state’s process

• Accurate disclosure and quantification

• Ability to manage related tax obligations

• Meeting deadlines without error

Working with professionals experienced in state and local tax matters—not just sales tax—can be critical to completing the VDA process successfully.

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On May 28, the U.S. Treasury released its Green Book, a 114-page document explaining the Biden Administration’s fiscal year 2022 tax proposals. The Green Book provides detailed insights into plans originally outlined in the American Jobs Plan and American Families Plan, including significant changes for corporations, high-income individuals, and multinational businesses.

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Corporate and International Tax Proposals

Corporate Income Tax

• Increase in corporate rate: From 21% to 28%, effective for tax years beginning after December 31, 2021.

• Blended rate for fiscal-year corporations crossing 2021 and 2022.

• Applies to entities tied to corporate rates (REITs, insurance companies, etc.).

• New 15% minimum tax on book income for corporations with $2B+ in global income.

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International Tax Reforms

GILTI and FTC Changes

• Repeal exemption for foreign oil & gas extraction income.

• Repeal high-tax exemption for GILTI and Subpart F.

• Country-by-country calculation of GILTI and FTC (replacing aggregate method).

• FTC limitation expanded to “branch” baskets.

• Adopt an OECD-consistent minimum tax inclusion rule for foreign-parented U.S. groups.

• Repeal IRC §904(b)(4) and expand §265 to disallow deductions tied to exempt income.

Effective Date: Tax years beginning after December 31, 2021.

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BEAT Replaced by SHIELD

• New regime: Stopping Harmful Inversions and Ending Low-Taxed Developments (SHIELD).

• Denies deductions for payments to “low-taxed members” based on global group income ratios.

• Applies to both direct and indirect payments, including cost of goods sold.

• Minimum tax rate tied to OECD agreement; defaults to 21% if no agreement is reached.

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Foreign Tax Credit for Hybrids and CTB Elections

• Applies Section 338(h)(16) to hybrid entity sales and check-the-box (CTB) elections.

• Aligns character and source rules with stock sale treatment.

• Aims to prevent FTC abuse and misclassification of income across baskets.

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Inversion Rule Expansion

• Eliminates 60% ownership threshold.

• New test: Inversion occurs if post-acquisition group is managed and controlled in the U.S., lacks substantial foreign activity, and domestic entity’s FMV exceeds the foreign acquirer.

• Broadens “acquisition” to include asset transfers from partnerships and businesses.

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FDII Repealed

• Repeals Foreign-Derived Intangible Income (FDII).

• Introduces 10% business credit for onshoring activities.

• Denies deductions for offshoring-related expenses.

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Individual, Estate, and Gift Tax Proposals

Top Marginal Rate

• Raised from 37% to 39.6%

  • Applies to incomes over:

    • $509,300 (married filing jointly)

    • $452,700 (single)

    • $254,650 (married filing separately)

Capital Gains

• Ordinary income rates on long-term gains for AGI over $1M.

• Retroactive to April 28, 2021.

• Top effective rate: 43.4% (39.6% + 3.8% NIIT)

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Realization on Transfers

• Transfers of appreciated property (e.g., gifts, death, trust transfers) trigger deemed sale.

• $1M exclusion per person, portable to surviving spouse.

• Family-owned businesses may defer tax until sale.

• 15-year payment plan available for certain non-publicly traded assets.

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Carried Interest

• Treated as ordinary income if taxpayer’s total income > $400,000.

• Self-employment taxes apply.

• Effective for tax years after December 31, 2021.

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Like-Kind Exchanges

• Tax deferral capped at $500,000 per taxpayer (or $1M per couple).

• Excess gain is taxable.

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Excess Business Losses

• Current limitation made permanent.

• Applies after December 31, 2026.

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Insights and Legislative Outlook

• Estate planning strategies (e.g., GRATs, defective grantor trusts) may trigger gain under new rules.

• The Green Book does not include:

  • Repeal of SALT cap

  • QBI deduction changes

  • Estate tax exemption rollback

These omissions don’t mean they’re off the table—they may re-emerge in negotiations.

Legislative Path:

• With slim Democratic majorities, all Senate votes matter.

• Budget reconciliation is likely needed to bypass the filibuster.

• However, moderate Senate Democrats may resist using reconciliation again in 2021.

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Conclusion:
The proposals in the Green Book could dramatically reshape the U.S. tax system. Multinational companies and high-net-worth individuals should begin modeling now and consult their tax advisors to plan for the potential impact.

Let me know if you want this version turned into a newsletter, formatted into a downloadable PDF, or summarized for executive briefings.

On April 19, 2021, Florida Governor Ron DeSantis signed S.B. 50 into law, officially making Florida one of the last states to adopt economic nexus and marketplace facilitator rules following the U.S. Supreme Court’s South Dakota v. Wayfair decision.

Under Wayfair, states can require remote sellers to collect and remit sales tax if their sales exceed a specific economic threshold—regardless of physical presence. Florida’s law aligns with this standard by setting a $100,000 sales threshold, but does not include a transaction count threshold like some other states.

Effective Date: July 1, 2021
Relief Deadline: October 1, 2021 (for remote sellers to register and receive relief from prior liability)

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Economic Nexus Threshold

Beginning July 1, 2021, remote sellers and marketplace facilitators with over $100,000 in taxable Florida sales in the prior calendar year are considered dealers, and must:

• Register with the Florida Department of Revenue

• Collect and remit Florida sales tax

• File returns for applicable periods

Definition of Remote Sales:
Retail sales of tangible personal property ordered from outside Florida (via internet, phone, or mail) and delivered into the state.

Note: Marketplace sellers only count direct (non-marketplace) sales when calculating the $100,000 threshold.

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Marketplace Facilitator Provisions

A marketplace provider is required to collect and remit tax on behalf of marketplace sellers for sales made through the platform. The law excludes certain service providers, including:

• Travel agencies

• Specific delivery network companies

• Payment processors whose only function is processing payments

Key Rules:

• Marketplace sellers do not collect sales tax on transactions when the provider certifies it will.

• Marketplace sellers must register and collect tax on direct (non-marketplace) sales.

• Starting April 1, 2022, large sellers ($1B+ U.S. sales) may contract with platforms to collect tax directly, if they’re registered.

Additional Fees (effective April 1, 2022):

Marketplace providers must also collect fees such as:

• Prepaid Wireless E911 Fee

• Waste Tire Fee

• Lead-Acid Battery Fee

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Audit and Liability Provisions

• The Department of Revenue (DOR) audits marketplace providers, not sellers.

• Providers can be relieved of liability if failures were due to incorrect seller data (not applicable for related parties).

• The DOR cannot double-assess sales tax to both the provider and seller for the same transaction.

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Relief for Prior Sales

Florida offers relief for tax, penalty, and interest on remote sales made before July 1, 2021 if:

• The business registers by October 1, 2021

• The seller was not under audit or formal collection action as of July 1, 2021

This relief also applies to:

• Marketplace sellers for pre-July 1 sales through facilitators

• Marketplace providers with physical presence, but only for sales made on behalf of others

Important: Data obtained during registration cannot be used to identify prior use tax liabilities for otherwise non-filing purchasers.

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County Surtax

Remote sellers and marketplace providers must collect county surtax based on the delivery location of taxable items.

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Insights

• The law aims to replenish Florida’s unemployment compensation trust fund and, once restored, reduce the business rental tax rate from 5.5% to 2%.

• The Florida Department of Revenue is authorized to adopt emergency rules to implement the law.

• Businesses should evaluate prior nexus exposure before registering and consider whether a Voluntary Disclosure Agreement (VDA) is appropriate.

The Biden Administration’s American Families Plan and other tax proposals may significantly reshape the tax landscape for high-income earners, particularly those making over $400,000 annually.

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Key Tax Proposals from the American Families Plan

• Increase the top marginal income tax rate to 39.6% for households earning over $400,000

• Tax long-term capital gains at 39.6% for households earning over $1 million

• Eliminate step-up in basis for gains above $1 million at death (unless donated to charity)

• Tax carried interest as ordinary income

• Permanently extend excess business loss limitation rules

• Apply the 3.8% net investment income tax uniformly to those earning over $400,000

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IRS Enforcement Expansion

To reinforce compliance, President Biden also proposes $80 billion in funding for IRS audits, targeting high-income taxpayers and those suspected of tax avoidance. This effort would be paired with expanded IRS enforcement authority.

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Additional Campaign Proposals Still on the Table

Although not part of the American Families Plan, these proposals remain under consideration:

• Phase out the 20% QBI deduction

• Limit itemized deductions to a 28% benefit and reinstate the Pease limitation

• Reduce the estate tax exemption from $11.7 million to $3.5 million and raise the estate/gift tax rate to 45%

• Impose the 12.4% Social Security tax on wages over $400,000

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What Should Taxpayers Do Now?

1. Review Your Current Tax Profile

High-net-worth individuals, business owners, and family offices should assess:

• Current income and deductions

• Estate structure and multi-generational planning needs

• Business interests and succession goals

2. Plan with Flexibility

Due to the uncertainty around the final scope or timing of new legislation:

• Use “what-if” modeling and scenario planning

• Consider the impact of retroactive provisions (e.g., capital gains tax changes effective April 28, 2021)

3. Capital Gains Strategy

• Accelerate gains before rate increases

• Coordinate capital gains with other income to avoid higher thresholds

• Use or opt out of installment sales based on timing

• Consider deferral tools: like-kind exchanges, opportunity zones, and ESOP rollovers

4. Revisit Your Estate Plan

• Consider gifting now before exemption limits change

• Explore trust strategies for multi-generational planning

• Prepare to act quickly if legislative changes gain momentum

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How We Can Help

We offer full-service planning for wealthy individuals and families, including:

• Tax consulting and compliance for estate, income, gift, and trusts

• Charitable giving and foundation strategies

• Executive compensation and retirement planning

• Cross-border tax analysis and compliance

• IRS audit support and representation

Our experienced professionals can help you:

• Monitor and interpret legislative developments

• Model tax scenarios

• Implement preemptive strategies to minimize liabilities

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Let us guide you through the complexities of today’s tax environment—with clarity, foresight, and customized planning tailored to your financial goals.
Contact us to schedule a confidential consultation.

On April 28, 2021, President Biden introduced the American Families Plan during a joint session of Congress. The proposal outlines substantial tax increases on high-income households, while expanding benefits and tax breaks for low- and middle-income families.

The $1.8 trillion plan includes:

• $1 trillion in investments

• $800 billion in tax cuts

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Key Investments in the Plan

• Free universal preschool

• Two years of free community college

• Programs to address teacher shortages

• Expanded childcare assistance

• School-based nutrition programs

• A national paid family and medical leave program

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Proposed Tax Breaks for Low- and Middle-Income Families

• Extend the expanded Child Tax Credit (from the American Rescue Plan Act) through 2025 and make it permanently refundable

• Permanently extend the Child and Dependent Care Credit and make it refundable

• Permanently extend the Earned Income Tax Credit (EITC) for childless workers

• Extend the Affordable Care Act (ACA) premium tax credits introduced in the American Rescue Plan

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Proposed Tax Increases to Fund the Plan

• Increase the top individual income tax rate to 39.6% for households earning over $400,000

• Raise the long-term capital gains and qualified dividends tax rate to 39.6% for those earning over $1 million

• Reduce the step-up in basis at death for gains over $1 million (or $2.5 million per couple, with real estate exemptions), taxing gains on inherited assets not donated to charity

• Eliminate carried interest treatment, taxing it as ordinary income

• Limit like-kind exchanges on real estate to $500,000 in gain deferral

• Make the excess business loss limitation permanent

• Apply the 3.8% Net Investment Income Tax (NIIT) consistently to individuals earning over $400,000

• Increase IRS enforcement and audits focused on higher-income taxpayers

The administration estimates these tax changes could raise approximately $1.5 trillion over 10 years.

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What’s Missing?

Notably absent from the plan:

• Estate tax exemption reduction

• Estate tax rate increase to 45%

Although these were part of Biden’s campaign platform, they may still be introduced in future legislation. While the estate tax represents a small portion of federal revenue, its potential reduction remains a priority for many Democratic lawmakers.

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Outlook and Planning Considerations

While ambitious, the American Families Plan is unlikely to be enacted exactly as proposed. Retroactive application is also unlikely. However, some level of tax increase is probable.

What Taxpayers Should Do Now:

• Review current estate plans

• Discuss wealth transfer strategies

• Consider timing of income and deductions

• Evaluate options for capital gains realization and deferral

• Stay informed on legislative developments

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How We Can Help

Our Private Client Services team offers comprehensive planning for individuals and families, including:

• Tax and estate planning

• Charitable giving strategies

• Retirement and compensation planning

• Cross-border consulting

• IRS audit assistance

We’ll help you stay informed, model “what-if” scenarios, and prepare a proactive plan tailored to your goals.

Contact your Private Client Services advisor today to review your options and prepare for what’s ahead.

The Biden administration’s first 100 days were largely focused on addressing the COVID-19 crisis—accelerating vaccine distribution and stabilizing public health. With that initial phase now behind him, President Biden has begun advancing broader policy priorities that span the economy, environment, technology, healthcare, and taxation.

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Priority: Putting the Pandemic Behind Us

The American Rescue Plan Act (ARPA), passed in March 2021, provided $1.9 trillion in stimulus focused on:

• Direct stimulus checks

• Expanded unemployment and paid leave

• Emergency small business relief

• Support for state/local governments

• Vaccine distribution and testing

What to Watch:
While the pandemic will eventually recede, its economic and societal impacts will linger. Forward-looking businesses are adapting to post-pandemic realities—rethinking how they manage employees, serve customers, and ensure resilience amid future disruptions.

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Priority: Doing Well by Doing Good

The administration has embraced Environmental, Social, and Governance (ESG) priorities, starting with climate action:

• Rejoining the Paris Agreement

• Proposing a $2T Clean Energy Revolution

• Eliminating fossil fuel emissions from power by 2035

• Promoting EV infrastructure, zero-emission transit, and eco-building standards

• Calling for a 50–52% emissions reduction by 2030 (vs. 2005 levels)

Regulatory Focus:
The SEC’s Climate & ESG Task Force is enhancing disclosure requirements for environmental, diversity, and governance practices.

What to Watch:
Public and investor expectations around ESG are growing. Forward-thinking companies are embedding sustainability, equity, and purpose into core operations—and those that do so effectively may see higher profitability and lower risk.

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Priority: Innovation in the Spotlight

The pandemic underscored America’s reliance on technology. The Biden administration acknowledges this while signaling increased oversight of Big Tech—particularly around:

• Antitrust enforcement

• Cybersecurity protections

• Data privacy regulation

What to Watch:
CFOs are doubling down on digital transformation, but balancing tech investment with regulatory compliance will be critical.
📊 BDO Survey Highlights:

• 55% plan to increase R&D spending

• 39% accelerated digital investments due to the pandemic

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Priority: Defining “Bidencare”

While sweeping healthcare reform is unlikely, the Biden administration is working to strengthen the Affordable Care Act (ACA):

• Expanding enrollment and subsidies

• Capping healthcare premiums at 8.5% of income

• Exploring a public option

What to Watch:
Employers should expect rising interest in expanded care access (especially mental health and telehealth) as employee well-being becomes a business imperative.

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Priority: Building Back Better

The American Jobs Plan outlines the administration’s infrastructure vision, including:

• Roads, bridges, airports, transit

• Electric vehicle (EV) charging networks

• Broadband expansion and clean water

• Modernizing schools and housing

• Investments in R&D and workforce training

What to Watch:
Infrastructure spending could provide a major boost to productivity and supply chain stability. Projects with environmental and equity components will likely take priority.

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Priority: Tax Increases on the Table

To fund investments, the Biden administration has proposed several tax changes:

• Raising the corporate tax rate from 21% to 28%

• Increasing individual tax rates on those earning over $400,000

• Enhancing GILTI and other international tax rules

• Reinstating elements of the corporate AMT

• Introducing surcharges and limiting deductions

What to Watch:
Per BDO’s 2021 Tax Outlook Survey:

• 92% of tax execs expect a corporate rate hike

• Priorities include income tax, international tax, and payroll adjustments

The midterms may dictate the legislative window for major tax reform. Until then, targeted changes are possible via reconciliation.

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Priority: Regulating Wall Street

Appointing Gary Gensler (SEC) and Rohit Chopra (CFPB), the administration signaled a stricter approach to financial regulation. Expect:

• Increased enforcement

• Enhanced consumer protections

• Closer scrutiny of disclosure and compliance standards

What to Watch:
Robust compliance and data governance will become key differentiators for businesses, not just regulatory requirements.

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Final Thoughts: The Role of Business in a Divided Climate

With midterm elections approaching and a polarized Congress, President Biden may face challenges pushing through all elements of his agenda. Businesses should prepare for rapid shifts, especially in ESG, innovation, infrastructure, and taxation.

Takeaway:
In moments of political gridlock, corporate leadership will play a pivotal role in driving progress. Businesses that align operations with policy shifts—and lead with purpose—can shape a more resilient and equitable economy.

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As you may know, the IRS extended the 2020 income tax filing deadline to May 17, 2021. However, this extension does not apply to all tax forms. One notable exception is Form 709, the Federal Gift Tax Return, which must still follow its original due date guidelines.

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When Is Form 709 Required?

You must file Form 709 if, in 2020, you:

• Gave more than $15,000 to any one individual (including gifts in trust)

• Made gifts under $15,000 to certain types of trusts

• Gave hard-to-value assets, such as:

  • Artwork

  • Closely held business interests

These are personal gifts—not charitable contributions, which are reported on your Form 1040.

Examples of recipients include:

• Family (e.g., children, nieces, nephews)

• Friends

• Business associates

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Important Filing Note for 2020

Although the deadline for filing Form 1040 was extended, the deadline to extend Form 709 remained April 15, 2021.

To extend your time to file Form 709, you must have filed either:

• Form 4868 – Application for Extension of Time to File Your Individual Income Tax Return

• Form 8892 – Application for Extension of Time To File Form 709

If neither form was filed by April 15, you may be considered late, even if you plan to file your Form 1040 by the extended May 17 deadline.

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What You Should Do Now

If you believe you may have a gift tax filing requirement, it is critical to act immediately. Late filing can result in penalties and interest, and missing an extension deadline further complicates compliance.

📞 Contact our office today at 561-995-0064 if you have questions or need assistance determining your filing obligations.

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We’re here to help and ensure you stay in compliance with evolving tax requirements.

Stay safe and well,

Lerro & Chandross PLLC