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Biden Unveils $1.8 Trillion 'American Families Plan,' Includes Proposal to Regulate Paid Tax Preparers

By:
Chris Gaetano
Published Date:
Apr 28, 2021
White House

President Joe Biden unveiled the specifics of what he is calling the American Families Plan, a $1.8 trillion package that he is pitching as a once-in-a-generation investment in the nation's future. This is his third major aid package to be proposed, on top of the American Rescue Plan and the still-in-progress infrastructure plan.

One of the provisions will give the IRS authority to regulate paid tax preparers, something the agency has long wanted to do, but had been previously stymied by the courts.

"As preparers play a crucial role in tax administration, and will be key to helping many taxpayers claim the newly-expanded credits, IRS oversight of tax preparers is needed. The President is calling on Congress to pass bipartisan legislation that will give the IRS that authority," said the White House.

The proposal's myriad other provisions include the following:

* $200 billion for free universal pre-school for all three- and four-year-olds; $109 billion for two years of free community college; $80 billion investment in new Pell Grants; $46 billion investment in historically black colleges and universities, tribal colleges and universities, and minority-serving institutions; and $9 billion to hire and train teachers from historically marginalized populations;

* $62 billion for a grant program for schools to invest in services such as child care and mental health services and faculty and peer mentoring; emergency basic needs grants; practices that recruit and retain diverse faculty; transfer agreements between colleges; and evidence-based remediation programs;

* $225 billion to subsidize child care to the point where no one will pays more than 7 percent of one's income on such services; provide funding to child care centers; and bumping the pay of child care staff to at least $15 an hour;

* $225 billion to establish a national paid medical and family leave program that will provide workers up to $4,000 a month,  for up to 12 weeks, with a minimum of two-thirds of average weekly wages replaced, rising to 80 percent for the lowest wage workers;

* $45 billion to make the summer Electronic Benefit Transfer (EBT) nutrition program permanent, and to have it cover all eligible children nationwide; expanding school meal programs; providing additional funds to schools that serve healthful school meals; and ending the ban on those with drug-related felony records from receiving Supplemental Nutrition Assistance Program (SNAP) benefits; 

* $200 billion to make the premium tax credits enacted as part of the American Rescue Plan permanent;

* Extending the expanded child tax credit into 2025, along with making it permanently refundable; making the temporary Child and Dependent Care Tax Credit (CDCTC) expansion enacted in the American Rescue Plan permanent; and making the Earned Income Tax Credit Expansion for childless workers permanent;

* Requiring financial institutions to report information on account flows so that earnings from investments and business activity are subject to reporting, as wages already are, as well as beefing up the IRS enforcement budget;

* Increasing the top tax rate on the wealthiest Americans to 39.6 percent; increasing the top capital gains tax rate to 39.6 percent; ending the step-up in basis for estate tax; permanently eliminating the carried interest provision; and ending the deferral of real estate taxes when people exchange property (applied to gains greater than $500,000).

As with the infrastructure provision, this is only an initial proposal. The ultimate form of the package will be contingent on what results from negotiations with Congress.

These, along with President Biden's other packages, will likely affect every aspect of the economy. With this in mind, Society members may be interested in attending upcoming conferences on matters relating to broker-dealersbusiness valuation and litigation services, employee benefits, health carebusiness and industry, and estate planning.

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