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Newsweek
5 days ago
- Politics
- Newsweek
AOC Mocked By Trump's Border Czar After Democratic Lawmaker Was Charged
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Tom Homan, President Donald Trump's border czar, mocked Democratic Representative Alexandria Ocasio-Cortez on Wednesday in connection to the criminal charges one of Ocasio-Cortez's Democratic colleagues is facing. Ocasio-Cortez recently said there would be a "problem" if the Trump administration arrested any of her coworkers, to which Homan responded: "I'm waiting on the consequences." The Context New Jersey Representative LaMonica McIver was criminally charged in connection to a scuffle that broke out this month when she, two other House Democrats and Newark Mayor Ras Baraka were visiting an Immigration and Customs Enforcement facility in Newark, New Jersey. Two days later, Ocasio-Cortez posted a video on Instagram saying the Trump administration would face a "problem" if its officials arrested any of the House Democrats who were at the facility. McIver, Representative Bonnie Watson Coleman and Representative Rob Menendez have said they were at Delaney Hall detention center to perform their congressional oversight duties. Alina Habba, the interim U.S. Attorney for the District of New Jersey, announced criminal charges against McIver on May 19; the New Jersey Democrat is accused of attacking ICE agents, an allegation she has vehemently denied. Rep. Alexandria Ocasio-Cortez, D-N.Y., attends the House Energy and Commerce markup of the FY2025 budget resolution in Rayburn building on Tuesday, May 13, 2025. (Tom Williams/CQ Roll Call via AP Images) Rep. Alexandria Ocasio-Cortez, D-N.Y., attends the House Energy and Commerce markup of the FY2025 budget resolution in Rayburn building on Tuesday, May 13, 2025. (Tom Williams/CQ Roll Call via AP Images) What To Know Homan mocked Ocasio-Cortez in connection to McIver's charges during an interview with Fox News host Laura Ingraham on Wednesday. "Well, remember just a couple of weeks ago, AOC went on social media saying if we put a finger on any of her coworkers—congresspeople—that were at our Newark facility, there'd be consequences," Homan said, referring to Ocasio-Cortez by her popular nickname. "Well, guess what? We did it. I'm waiting on the consequences." Ocasio-Cortez accused Homan and other top Trump administration officials of violating the law in her video. "If anyone's breaking the law in this situation, it's not members of Congress, it's the Department of Homeland Security," the New York Democrat said. "It's people like Tom Homan and [Homeland Security] Secretary Kristi Noem." Ocasio-Cortez, one of the most progressive members of the House of Representatives, who the White House recently described as the "leader" of the Democratic Party, went on to accuse the Department of Homeland Security of employing "public intimidation" tactics to silence critics. "You lay a finger on someone, on Representative Bonnie Watson Coleman ... or any of the representatives that were there, you lay a finger on them, we are going to have a problem," Ocasio-Cortez said in the Instagram video. "Because the people who are breaking the law are the people not abiding by it." Ocasio-Cortez posted the video after DHS spokesperson Tricia McLaughlin suggested that Coleman, Menenedez and McIver could be arrested over the Delaney Hall visit. A little over a week after the video was posted, Habba announced the charges against McIver. Ocasio-Cortez has gone on a tear against the Trump administration since President Donald Trump took office in January. Earlier Wednesday, she renewed her longtime call to "abolish ICE," saying in a fundraising email that ICE, "an agency that was just formed in 2003 during the Patriot Act era, is a rogue agency that should not exist." The White House attacked Ocasio-Cortez over the email, slamming "the Democrat Party leader" for demanding the agency be dismantled. Ocasio-Cortez's call to abolish ICE comes after the agency recently surpassed Border Patrol in arrests amid Trump's pressure to ramp up deportations. The administration is also embroiled in court battles across the country challenging Trump's authority to deport migrants without due process—many of whom have not been convicted of crimes—and terminate the legal status of international students who protest the Israel-Hamas war in the Gaza Strip, which has killed tens of thousands of civilians. What Happens Next McIver said she intends to fight the charges against her in court. Representative Nancy Mace of South Carolina also recently filed a resolution to expel McIver from Congress, which the New Jersey Democrat later mocked on social media. This story is developing and will be updated as more information becomes available.
Yahoo
16-05-2025
- Health
- Yahoo
D.C. Dispatch: Iowa's U.S. representatives support bills that cut Medicaid and SNAP
The U.S. Capitol. (Photo by Jennifer Shutt/States Newsroom) Some health care workers and other Iowans opposed to proposed cuts to Medicaid and SNAP being discussed by U.S. House Republicans criticized Iowa's federal delegation as they work on the committees tasked with moving those proposals forward. U.S. Rep. Mariannette Miller-Meeks is a member of the House Energy and Commerce committee, the body that voted 30-24 Wednesday along party lines to approve the bill making billions in cuts to federal spending that could include work requirements and other restrictions on Medicaid. According to analysis from the nonpartisan Congressional Budget Office, the changes in the bill would cut $625 billion in federal spending over the next 10 years. Physicians in the Committee to Protect Health Care urged House members from their districts, including Miller-Meeks, to oppose the House GOP's budget bill and criticized them for supporting the measure. Dr. Brian Lindsay, an internal medicine physician from Cedar Rapids, said in a statement that Miller-Meeks, who is also a physician, 'must be familiar with the tragic stories doctors witness every day when people aren't able to access or afford health care.' 'As physicians, we challenge politicians like Congresswoman Miller-Meeks to explain how taking away her own constituents' health care makes their lives better or our community stronger,' Lindsay said in a statement. 'When people can't see a doctor or afford to get the treatment they need, people suffer, some go bankrupt because of huge medical bills and unfortunately, some people die. Every Iowan must stand up and speak out against this reckless Republican plan to take away people's ability to get medical care so politicians can give huge handouts to billionaires.' Eric Kusiak, a nurse manager in Iowa's 1st congressional district, said the cuts could put rural Iowa hospitals at risk of closing in a statement with Fairness for Iowa, a liberal coalition that supports unseating Miller-Meeks and U.S. Rep. Zach Nunn, Iowa Republicans in potentially vulnerable seats heading into the 2026 election. 'With these cuts, patients would get sicker, have fewer places to go, and have fewer healthcare workers to care for them,' Kusiak said. 'House Republicans and Miller-Meeks voted to take health care from millions of people including seniors, kids, and veterans to pay for more tax giveaways to the wealthy and corporations.' Miller-Meeks said in a post on social media Wednesday that Democratic Presidents Barack Obama and Joe Biden 'made the rules, then broke' Medicaid, and the House GOP plan will 'fix' the health coverage program. 'Medicaid is for the most vulnerable low-income families, pregnant women, kids, seniors and the disabled — not illegal immigrants or able-bodied men who choose not to work,' Miller-Meeks wrote. Nunn and U.S. Rep. Randy Feenstra of Iowa are on the U.S. House Agriculture Committee, that was similarly tasked with finding spending cuts to make to federal programs including the Supplemental Nutrition Assistance Program (SNAP). Approved 29-25 Wednesday, the bill moved forward by the committee will shift some portions of SNAP funding to states for the first time. In a video posted on social media Wednesday, Nunn defended his support of the measure, saying voters have 'heard a lot of spin about what's happening with SNAP.' He pointed to the resolution he proposed earlier in May, the 'Defending Medicaid and SNAP Resolution,' as a step he has taken to ensure SNAP benefits are not cut for seniors, pregnant women, children and people with disabilities. 'Now, here's what I'm also going to do: I'm going to make sure these systems are successful now and into the future, fighting getting rid of the fraud, waste and abuse,' Nunn said. 'And that means making sure that able-bodied individuals are working at least part-time jobs, and states that have had massive error rates are held accountable so they can correct that for the future.' He said these changes will provide more money for the program in the future to allow 'vulnerable Iowans get the assistance they need' through SNAP in the future. However, Democrats and others involved in food assistance programs said the cuts will hurt Iowans who rely on SNAP to purchase food for their families. Iowa House Minority Leader Jennifer Konfrst, who is running as a Democratic candidate in the 3rd District, said Thursday Nunn was 'screwing over farmers and families' with his support for the bill. 'I wanted to rest up a little bit this morning, but I can't, because I'm so angry,' Konfrst said, referring to the overnight debate leading to the end of the 2025 legislative session at the Iowa Capitol. 'Zach Nunn has the opportunity to do the right thing and do what's best for families, farmers, and veterans back here in Iowa. But instead, he did what he always does, which is fall in line with his party bosses and vote to devastate his own district. ' Feenstra, who also serves on the House Ways and Means Committee, said he supported the bill because it lowers taxes for Iowa families, farmers, workers and businesses 'while supporting investments in domestic manufacturing, business growth, Iowa agriculture, and U.S. energy production.' 'I'm also glad that provisions that I led are included like death tax relief, paid family and medical leave for employees of small businesses, affordable crop insurance policies for young and beginning farmers, investments in foreign animal disease prevention, and expansion of our export markets,' Feenstra said in a statement. 'Working with President Trump, we are delivering on our promise to the American people to cut taxes, grow our economy, secure our border, and unleash American energy production.' Feenstra announced he was launching an exploratory committee for a gubernatorial run Tuesday after filing paperwork for a run the day earlier. Iowa Democratic Party Chair Rita Hart said Feenstra's decision to support the budget bill making cuts to SNAP is a sign that Iowans should not support him to become the state's next governor. 'Iowans need a governor that works for them,' Hart said in a statement. 'While many Iowans are struggling to afford groceries and Iowa is ranked 49th in the nation in economic growth and 48th in personal income, Randy Feenstra voted today to gut SNAP – which is a program that more than 260,000 Iowans rely on and generates economic activity that impacts our farmers, grocers, truck drivers and more. … Randy Feenstra also voted to approve tax cuts for billionaires and the nation's top 1 percent. Feenstra put requests from greedy billionaires over the needs of Iowans today and showed his priorities are not the same as the Iowa folks he seeks to govern.' While Iowa's federal delegation voted in support of these measures, the House budget committee voted 16-21 Friday to reject the spending package that includes the cuts to Medicaid and SNAP. Alongside Democrats, four Republicans, US. Reps. Josh Brecheen of Oklahoma, Andrew Clyde of Georgia, Ralph Norman of South Carolina and Lloyd Smucker of Pennsylvania, voted against the measure while calling for steeper budget cuts to be included. Though the measure has stalled, budget negotiations are continuing as House Republicans aim to approve a measure next week before the end of next week, when U.S. representatives are set to leave Washington, D.C. for a week-long recess.
Medscape
16-05-2025
- Business
- Medscape
Federal Budget Bill Includes Medicare Pay Hike for MDs
The massive budget bill now being debated in Congress includes a proposal for raising Medicare pay for clinicians starting in 2026. That could be good news for physicians who in 2025 saw a nearly 3% effective pay cut in Medicare reimbursement. However, clinicians and advocates remain concerned about potentially large cuts to Medicaid, which covers about 71 million Americans. The modest increase for 2026 Medicare pay is 'welcome, but this is a large and complicated bill,' Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, told Medscape Medical News . The House and Senate have yet to agree on the budget reconciliation bill. Substantial Medicaid cuts also would likely have 'negative repercussions for physician reimbursement,' Gilberg told Medscape Medical News . 'It remains to be seen how this will all net out in the end, but we appreciate our physician champions in the House working to address Medicare reimbursement shortfalls in an otherwise austere legislative package as it relates to healthcare,' Gilberg said. A 2025 Medicare Pay Cut Congress allowed a 2.83% cut in 2025 to the Medicare conversion factor, which is key to setting Medicare payment rates for services provided by about 1.3 million clinicians, including physicians, nurse practitioners, and physician assistants. The Republican-controlled House Committee on Energy and Commerce has proposed raising the Medicare conversion factor equal to 75% of the estimated percentage increase in inflation, as determined by the Medicare Economic Index (MEI). In 2027 and following years, the increase would be 10% of that index. Still, the committee's Democrats called this week for more than just a stopgap Medicare pay hike. 'This is woefully underfunding the need to address inflation,' said committee member Rep. Raul Ruiz, MD (D-CA), who worked as an emergency physician before joining Congress. 'The Medicare physician fee schedule needs a permanent fix, not this temporary, short-changed fix.' Reconciliation Proves Challenging The Medicare pay proposal is part of House Committee on Energy and Commerce's section of a wide-ranging draft GOP legislative package, known as a reconciliation bill. The committee on Wednesday passed its section of the reconciliation text in a 30-24 vote along party lines. Reconciliation is a special process in Congress that allows lawmakers to bypass some Senate procedural hurdles. It's a rare chance for the majority party to move significant legislation without getting the bipartisan support usually required for Senate passage of bills. Reconciliation requires House and Senate lawmakers to concur on a budget blueprint, which has proven challenging. Continued Interest in Physician Payment There's strong bipartisan support in Congress for revising the Medicare physician fee schedule. A bill introduced in 2023, which would have provided for an update equal to the annual MEI percentage increase, had 126 Democratic and 47 Republican co-sponsors. Mark Miller, PhD, executive vice president of healthcare at the philanthropy Arnold Ventures, said Congress should try to shift Medicare away from its current reliance on the fee-for-service model. Physicians earn revenue through both the volume of services provided and the price, as reflected in the payment rate, said Miller, a former executive director of the Medicare Payment Advisory Commission. 'Keeping in mind that Medicare physicians are financed by taxpayers and beneficiary premiums, payment rates should be deemed adequate when they assure beneficiaries have access to high-quality care — rather than blindly defaulting to the full Medicare Economic Index,' Miller wrote. 'That said, the long run updates…may be inadequate, and the Congress likely will need to revisit the updates — which will result in higher costs to taxpayers and beneficiaries,' Miller said. He suggested offsetting these new costs with cuts to payments to Medicare Advantage plans for 'upcoding,' or making patients appear more ill than they are. Miller said savings could also be achieved by a shift to site-neutral policies, which would end higher pay for some services depending on the ownership of the facility.
CBS News
15-05-2025
- Business
- CBS News
House GOP pushes Trump's "big, beautiful bill" forward after all-nighter
Washington — The House is moving forward on President Trump's "one, big beautiful bill," as three committees on Wednesday voted to advance some of the most contentious parts of the major budget package aimed at addressing the president's defense, energy and tax priorities. The Ways and Means, Energy and Commerce and Agriculture committees met Tuesday and Wednesday to debate and vote on their proposals as Republicans remained divided on a number of major issues — from Medicaid to tax cuts. Ways and Means faces SALT conflict After a nearly 18-hour markup, the Ways and Means panel, which is responsible for the tax portions of the bill, advanced its portion of the legislation Wednesday morning, in a 26-19 vote. But the key sticking point, a cap on the state and local tax deduction, often referred to as SALT, appeared to go unresolved. Republicans who represent blue states have pushed for an increase to the $10,000 cap, but balked at a proposed $30,000 cap in recent days. On SALT, House Speaker Mike Johnson, a Louisiana Republican, said Wednesday morning that he's serving as the "neutral umpire" in the conversations between red state and blue state Republicans, adding that "I'm absolutely confident we're going to be able to work out a compromise that everybody can live with." Energy and Commerce deals with Medicaid Meanwhile, the Energy and Commerce Committee debated for more than 25 hours before advancing its portion of the legislation in a 30-24 vote on Wednesday afternoon. The panel was tasked with finding $880 billion in cuts, which has implicated the popular entitlement program Medicaid. The Energy and Commerce proposal, unveiled Monday night, would impose work requirements for able-bodied adults without children, more frequent eligibility checks, cuts to federal funding to states that use Medicaid infrastructure to provide health care coverage to undocumented immigrants and a ban on Medicaid covering gender transition services for children. Agriculture Committee votes on food stamp changes The Agriculture Committee — tasked with finding $230 billion in cuts — also voted on its portion of the bill Wednesday evening, passing it in a 29-25 party-line vote after a process that began late Tuesday. The most contentious issue handled by the Agriculture panel surrounds the Supplemental Nutrition Assistance Program, widely known as food stamps. The committee's proposal would increase the age requirement for able-bodied adults without children to qualify for benefits, while shifting more of the costs to states. The bill updates the age requirement to 64, up from 54. Republicans also want to close a loophole for work requirement waivers that states could request for areas with unemployment rates over 10% or lack "a sufficient number of jobs." House aims for vote next week — but Senate still needs to weigh in House GOP leadership celebrated the committee stage nearing a close in their weekly presser Wednesday morning. "A lot of work has gone into getting 11 committees ready to complete all of their work today," House Majority Leader Steve Scalise, a Louisiana Republican, said. Republican leaders have been pushing to have the bill on the floor by next week, with the House Budget Committee expected to meet in the coming days to put the bill's components into one massive legislative package. After that, the measure would then go to the House Rules Committee before it can be brought to the floor for a vote. "This process isn't over. We're just getting close to maybe half time," Scalise said. "When we pass this bill next week through the House, it will go to the Senate, they'll do their work. But we will get this bill to President Trump's desk before the July 4 deadline that the White House has asked for." Johnson also touted the progress on the legislation so far Wednesday, calling it "one of the most consequential pieces of legislation ever passed by the United States Congress." "It is large, it is comprehensive, and it deals with reconciling the budget in a way that will be fiscally responsible," Johnson said. Still, across the Capitol, a handful of Senate Republicans began expressing concerns about the House's legislation, prompting discussions about seemingly inevitable changes to the package in the upper chamber. Senate Majority Leader John Thune, a South Dakota Republican, told reporters Wednesday that he hopes the House sends over legislation that the upper chamber can "use as a base." "I think we've assumed all along that the Senate would have its input on this," Thune said, noting that they have been coordinating closely with the House. "Obviously there's 53 Republican senators who want to have their own thoughts and ideas incorporated." Kaia Hubbard Kaia Hubbard is a politics reporter for CBS News Digital, based in Washington, D.C. and contributed to this report.
Forbes
14-05-2025
- Business
- Forbes
House Tax Plan Would Kill Direct File And Rescue Controversial Contingency Fees
NORTH HALEDON, NJ - APRIL 15: In this photo illustration, a 1040 U.S. Individual Income Tax Return document is seen on a desk on April 15, 2024 in North Haledon, New Jersey. (Photo illustration by) If you were expecting the budget reconciliation process to be easy, you haven't been paying attention. Several committees are working on language related to the bill, including Agriculture, Energy and Commerce, and Ways and Means. Each of those committees will also consider amendments, proposals, and markups. That means there are several working parts and, in some cases, different priorities. Add-ons like plans to nix IRS Direct File may not have been included in early drafts, but appear as the process churns on. Even as the Energy and Commerce Committee considered significant changes to Medicaid, including work requirements, most of the tax-specific language will come from the Ways and Means Committee. The committee released a draft version of the bill over the weekend, and a substitute amendment was made public on Monday—you can read a summary of some of the early highlights here. Included in the substitute amendment were a few IRS-specific provisions that did not appear in the original draft. At the top of the list? Eliminating IRS Direct File. The language in the amendment requires the Treasury to ensure that the IRS Direct File program has been "terminated" no later than 30 days after the enactment of this Act. That isn't all. The bill would then require creating a task force to "design a better public-private partnership between the IRS and private sector tax preparation services" to replace Free File and Direct File. Under the amendment, the task force is directed to report on "1) the cost of a new public-private partnership to provide for free tax filing for up to 70 percent of all taxpayers calculated by adjusted gross income to replace free file and any IRS- run direct file programs; (2) taxpayer opinions and preferences regarding a taxpayer-funded, government-run service or a free service provided by the private sector; (3) assessment of the feasibility of a new approach, how to make the options consistent and simple for taxpayers across all participating providers, how to provide features to address taxpayer needs, and how much money should be appropriated to advertise the new option.' The amount of money earmarked is $15,000,000. If you're feeling a bit of deja vu, you're not wrong. The Inflation Reduction Act of 2021 also created a task force to design a direct file tax return system. The task force was required to explore the "(I) the cost (including options for differential coverage based on taxpayer adjusted gross income and return complexity) of developing and running a free direct efile tax return system, including costs to build and administer each release, with a focus on multi-lingual and mobile-friendly features and safeguards for taxpayer data; (II) taxpayer opinions, expectations, and level of trust, based on surveys, for such a free direct efile system; and (III) the opinions of an independent third-party on the overall feasibility, approach, schedule, cost, organizational design, and Internal Revenue Service capacity to deliver such a direct efile tax return system." The cost? Also $15,000,000. (Apparently, it was such a good idea that the House wants to gut it and do it all over again.) The result of the IRA was a limited-scope pilot of Direct File, which debuted in 2024. The pilot, the IRS claimed, was a success. The tax agency said that Direct File users reported a high degree of satisfaction and quick answers to their filing questions. After the first year, the Treasury Department declared that Direct File would be a permanent, free tax filing option. The IRS also expanded the program in 2025 to include more states and the ability to handle more kinds of income, credits, and deductions. Following the 2024 election, Musk and Vivek Ramaswamy, at that time leaders of the Department of Government Efficiency (DOGE), reportedly discussed creating a mobile app for Americans to file their taxes for free with the IRS. That program already existed—Direct File. In 2025, the program found itself in DOGE crosshairs when Musk posted on X (formerly Twitter) that he had "deleted" 18F, the group responsible for creating the technology behind Direct File. Critics of Direct File point to Free File, an existing program offered as part of a public-private partnership between the IRS and Free File Inc., formerly the Free File Alliance. Through this partnership, tax preparation and filing software providers make their online products available to eligible taxpayers (as compared to Direct File, an IRS program). Free File debuted in 2003 and was occasionally marred by allegations that participating tax software companies, including TurboTax and H&R Block, hid free options to get taxpayers to pay for services. The allegations created quite a stir—and resulted in litigation. Today, tax preparation software companies are prohibited from hiding free filing services from Google or other search results pages. Following the changes, Intuit and H&R Block opted out of the program. While Free File remains on the books, the current administration has already signaled that it will eliminate Direct File. A Congressional move would make it official. Access to taxpayer data is tightly restricted by law—a protection that's been in the news recently because of demands by DOGE to access that data. In 2024, a former IRS contractor was sentenced to five years in prison for disclosing thousands of tax returns, including Donald Trump's tax returns, without authorization. That contractor, Charles Littlejohn, pleaded guilty to unauthorized disclosure of tax return and return information—a violation of section 7213(a)(1) of the tax code, the most serious offense for leaking tax information. Littlejohn had faced—and was sentenced to—the maximum penalty of five years in prison. That was true even though Littlejohn leaked information for multiple taxpayers. The substitute amendment would increase the penalties for violating section 7213(a) from "$5,000, or imprisonment of not more than 5 years" to "$250,000, or imprisonment of not more than 10 years." The language in the bill would also expand the punishment. Currently, a leak is generally considered a single violation. Under the language in the amendment, when there are multiple disclosures, as in the case of Littlejohn, the disclosure of information for each affected taxpayer would be considered a separate violation. Language in the amendment would also put the brakes on efforts to "regulate, prohibit, or restrict the use of a contingent fee" in connection with tax returns or claims for refund. Contingent fees typically represent a percentage of an amount received—in the context of lawsuits, you tend to see them as a percentage of the total award. When it comes to tax returns, they may be a percentage of the expected refund or a percentage of tax "savings"—however that is defined. Earlier this year, Treasury and the IRS released proposed regulations to update the rules for certain tax professionals, including attorneys, certified public accountants (CPAs), and enrolled agents (EAs) who can practice before the IRS. These rules have long been found in Treasury Department Circular 230. Rules published in 2007 prohibited tax professionals from charging contingent fees for original returns but permitted practitioners to charge a contingent fee for certain services rendered in connection with an audit or challenge to an original tax return, amended returns, or claims for refund or credit. Treasury and the IRS subsequently clarified the 2007 amendments in 2008 and proposed modifications in 2009. The 2009 proposed regulations were never finalized. The IRS has continued to bump up against contingent fees. The section of Circular 230 that prohibits practitioners from entering into contingent fee arrangements for services rendered in connection with a "matter before the IRS" would be removed under the proposed regulations. However, the term "disreputable conduct" would include charging contingent fees for preparing an original or amended tax return or claim for refund or credit, as well as charging fees that are unconscionable under the facts and circumstances. The American Institute for Certified Public Accountants (AICPA) Code of Professional Conduct prohibits CPAs from charging contingent fees for preparing original returns, amended returns, and ordinary refund claims because of the risk that these arrangements would allow a CPA to improperly benefit from the transaction. Many state accountancy board rules also ban contingent fee arrangements for preparing an original or amended return or claim for refund or credit. Here's why the IRS doesn't like these fees. A contingent fee based on getting a big refund may encourage evasion or abuse of tax laws by incentivizing practitioners to take unduly aggressive tax positions. That gives the practitioner "a direct, financial interest in the tax benefits of a client." And that, says the IRS, is "incompatible with ethical practice" before the Treasury Department or the IRS under Circular 230. Contingent fees have recently gotten a second look because of employee retention credits (ERC). Those assisting companies with ERC applications often took a contingent fee—typically, a percentage of the refund due the taxpayer. The IRS encouraged taxpayers to be wary of promoters who charged a contingent fee because of concerns that the economic driver could push promoters to suggest ineligible people file a claim for the credit and that they might not inform taxpayers that they must reduce the wage deductions they claimed on their federal income tax return by the amount of the credit. Especially in cases where the contingent fee is collected upfront, the IRS has warned that in the case of an ERC denial (or audit), the taxpayer may be stuck with a reduced credit or penalty—and out the contingent fee. The ERC contingency fees were also in the news because it has been widely reported that some tax firms paid Trump's nominee for IRS Commissioner, Billy Long, on a contingency basis. Expect that issue to come up again while contingent fees are still considered controversial. Green-lighting contingency fees by banning regulations or restrictions would change the conversation. Long's confirmation hearing is scheduled for May 20, 2025. You can see the original draft version of the bill before the markup here. The Smith amendment version is here. The bill is still working its way through the House where Republicans hold a slim majority. Even it's approved, the House bill must conform with the Senate version to be signed into law. Keep checking our coverage for more details.
