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5th May 2026
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THE HOT STORY

Roberts’ taxing power doctrine shows broad but uneven approach

Chief Justice John G. Roberts Jr. asserts that Congress's taxing power is a "birth-right power," suggesting its uniqueness among legislative authorities. In the case of Learning Resources Inc. v. Trump, Roberts emphasized that Congress can tax both activity and inactivity, reinforcing the idea that taxes can serve regulatory purposes. He stated: “Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods.” This perspective aligns with his earlier ruling in NFIB v. Sebelius, where he expanded the understanding of taxing power. However, Roberts also cautioned against Congress delegating this significant power without clear guidelines, highlighting the risks involved. His opinion underscores the importance of transparency when exercising such a substantial authority.

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TAX

Senate Dem proposes bill targeting $50m+ tax-avoiding trusts

Sen. Patty Murray (D-WA) is introducing new legislation aimed at closing a tax loophole that allows wealthy Americans to evade taxes on inherited wealth. The Fair Trusts for Fiscal Responsibility Act proposes a withholding tax on assets over $50m held in specific trusts, with rates starting at 1% and increasing to 3% for assets above $1bn. Ms. Murray emphasized the need for fairness, saying: “What we have right now is a loophole in the estate tax . . . being used by the ultra-wealthy to keep from paying their fair share.” The bill could generate an estimated $675bn over ten years, potentially funding universal childcare and restoring health insurance subsidies. However, it faces opposition from Republicans and potential legal challenges regarding its implementation.

New York City faces credit downgrade risk

New York City's risk of a credit-rating downgrade has escalated, as JPMorgan Chase & Co. strategists indicate that the likelihood of New York State approving significant tax hikes to address budget deficits appears low. "We believe downgrade risk, which was already elevated, has increased," said Peter DeGroot, leading the analysis. The city faces a $5.4bn two-year budget deficit, prompting Moody's and Fitch Ratings to revise their outlook to negative. Gov. Kathy Hochul has resisted tax proposals from Mayor Zohran Mamdani, including a tax credit limitation that could generate $1bn in revenue. A proposed surcharge on second homes valued over $5m has sparked opposition, while the city may need to tap into reserves, which credit analysts view unfavorably. The city's credit rating hinges on achieving budgetary balance through sustainable measures.

Newsom faces budget dilemma

As California Gov. Gavin Newsom approaches the end of his term, he faces a critical challenge: addressing the state's chronic budget deficit. With a spending plan due on May 14th, Newsom must choose between raising taxes, cutting programs, or relying on temporary fixes. “Any cuts you make are going to cause people to scream,” noted Darry Sragow, a Democratic strategist. The state has seen spending grow by about $100bn since 2019, outpacing revenue growth by 10%, leading to a structural deficit. The Legislative Analyst's Office warns that without significant changes, California's fiscal sustainability is at risk. Newsom's decisions will not only impact his legacy but could also affect his potential presidential aspirations in 2028. As he prepares to unveil his budget, the pressure mounts to find durable solutions rather than temporary fixes.

CORPORATE

IRS seeks more taxes from Amgen

Amgen is facing fresh demands from the IRS for additional taxes linked to profits booked in Puerto Rico, on top of the $10.7bn it has already said it may owe. The dispute centres on allegations that the biotech group shifted US earnings to the lower-tax jurisdiction, echoing an earlier case covering 2010–2015 that remains before the Tax Court. The company said the latest proposed adjustments relate to the 2016–2018 period and could significantly increase its overall liability.

LEGAL

Elon Musk settles SEC lawsuit over Twitter disclosures

Elon Musk has settled a civil lawsuit with the Securities and Exchange Commission (SEC) regarding his delayed disclosure of Twitter stock purchases. The SEC had accused Musk of delaying the announcement of his 5% stake in Twitter, allowing him to buy shares at lower prices. A trust in Musk's name will pay a $1.5m civil penalty without admitting wrongdoing. The settlement marks the largest civil penalty for such violations in SEC history. "Mr. Musk ⁠has now been cleared of all issues related to the late filing of forms in the Twitter acquisition, as we said from the outset he would be," his lawyer Alex ​Spiro said. "It's ​an embarrassing day for the SEC," observed Amanda Fischer, former chief of staff to Gary Gensler, who chaired the regulator during the Biden administration. She said the settlement "should cause the public to question whether ‌the SEC ⁠is protecting White House insiders at the expense of ordinary investors.”

Meta court case could determine whether the firm will be declared a public nuisance

Meta is back in a New Mexico courthouse as part of an ongoing child safety case that could determine whether the company is considered a “public nuisance.” The platform lost the first round of the trial centering on claims brought by New Mexico Attorney General Raúl Torrez that it failed to safeguard children on its apps from sexual predators and misled the public about alleged harms from use of apps including Instagram and Facebook. The trial which started on Monday marks the second phase of the state's lawsuit and will seek to establish over a three-week period if Meta’s actions created a public nuisance, which would precipitate sweeping changes to how Facebook, Instagram and WhatsApp operate. “The New Mexico Attorney General’s focus on a single platform is a misguided strategy that ignores the hundreds of other apps teens use daily,” a ​spokesperson for Meta said ahead of the trial.

Former IRS agent charged over alleged $12m embezzlement scheme

Robert M. McCloughy, a 43-year-old former IRS revenue agent from Carlstadt, NJ, has been charged with wire fraud and two counts of engaging in monetary transactions involving criminally derived property. The U.S. Attorney's Office District of New Jersey reported that McCloughy allegedly embezzled over $12m while serving as CFO and controller of a fuel company from March 2017 to March 2025. He misappropriated funds through unauthorized reimbursements and bank transfers, while falsifying company records to conceal his actions. Federal prosecutors noted that he engaged in money laundering by gambling large sums at online sportsbooks and casinos. No attorney has been listed for McCloughy.

PERSONAL FINANCE

Advisors seen as key to unlocking 401(k) tax credit uptake

Despite recent federal initiatives to encourage retirement savings, tens of millions of American workers still lack access to 401(k) plans. President Donald Trump recently signed an executive order to launch TrumpIRA.gov, aimed at promoting the "saver's match" program set to begin in 2027. However, participation in retirement plans remains low, with only 7.2% of eligible companies participating, up from 1.1%. Will Hackler, managing partner at Integrated Partners, emphasized the need for better collaboration between financial advisors and accountants, observing: "The process hasn't been built for it." Approximately 41 million workers aged 18 to 65 lack any retirement plan, underscoring the urgent need for legislative changes to improve access. John Lettieri, CEO of the Economic Innovation Group, called the executive order a crucial step in addressing the flaws in the U.S. retirement system.

WEALTH MANAGEMENT

Wealth tax plans reshape financial strategies

Wealth tax plans, such as California's Billionaire Tax Act, are influencing how high-net-worth individuals manage their assets. Advisers are encouraged to use these proposals as a catalyst for proactive planning, as clients increasingly seek guidance on liquidity and wealth transfer strategies. Karin Christenson, a senior wealth planner at Wilmington Trust, emphasizes that "in an environment of uncertainty, policy signals will continue to prompt earlier and more proactive planning conversations." The complexities of domicile changes and the implications of residency claims are critical considerations for families, especially as states scrutinize residency more closely. While domestic relocations are rising, international moves are often driven by personal factors rather than tax policy alone. Ultimately, flexibility and thorough documentation are essential for effective wealth management in this evolving landscape.

FRAUD

Companies issue alerts over IRS CP53E scam notices

Accounting firms are raising alarms about increasing scams related to the CP53E notices issued by the IRS. These notices, sent to taxpayers lacking direct deposit information, have reportedly reached over 1.4m as of March. Grassi and CBIZ have warned clients about potential fraudulent notices, advising caution with QR codes or links. "Even if a legitimate notice does reference IRS.gov, it is safest to type the website into your browser," Grassi cautioned. Additionally, many legitimate notices may have been sent in error, as noted by Rayle Hernadex, a senior tax associate at CBIZ. Taxpayers are urged to verify their information directly through the IRS website rather than responding to suspicious communications.

TECHNOLOGY

Apple to introduce custom pass creation in iOS 27 Wallet upgrade

Apple is planning to launch a new “Create a Pass” feature in iOS 27 that will allow users to build and customize their own digital tickets, memberships and gift cards directly within the Wallet app. The tool will enable users to generate passes from QR codes, particularly useful where third-party services lack Wallet integration, while offering customization options including styles, colors, images and text fields, with templates for standard, membership and event use cases. The update is part of a broader iOS 27 rollout expected to be unveiled at Apple’s June developer conference, which will also include expanded AI capabilities and enhancements to Siri, bringing Apple Wallet closer in functionality to competing platforms such as Google Wallet.
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