Brantley Janson Yost & Ellison

"Treasury is working expeditiously to provide clarity and certainty to taxpayers, so the climate and economic benefits of this historic legislation can be felt as quickly as possible," he said

Adeyemo also referenced the additional funding the Internal Revenue Service is receiving due to the Inflation Reduction Act He noted that a "well-resourced IRS … is essential for effective implementation of the IRA’s clean energy credits and other tax benefits, and for ensuring fairness of our tax system overall " Adeyemo’s comments come as Republicans in their new majority in the House of Representatives begin to work on abolishing the IRA and dismantling the IRS

Already passed in the GOP-led House is the Family and Small Business Taxpayer Protection Act (H R 23), which would eliminate the additional IRS funding in the IRA and in particular targets the 87,000 new hires by the agency GOP messaging continues to misrepresent those new hires as all being IRS agents who will target low- and middle-income taxpayers with audits, despite the stated purposed of those new hires to be primarily for customer service, with the new agents that do get hired to be used to target the wealthiest taxpayers in an effort to ensure they are paying their fair share and to close the tax gap

Indeed a one-sheet on the H R 23 posted to the House Ways and Means website highlights that the bill is targeting the 87,000 new hires which it claims will all be agents The bill passed the House on January 9, 2023, by a 221-210 vote along party lines The Senate is likely not going to take up the bill and President Biden already threatened a veto if the bill made it to his desk

The Congressional Budget Office estimates that enacting this bill would actually reduce revenue by nearly $186 billion and increase the deficit by more than $114 billion

House Republicans also introduce a bill (H R 25) that would abolish the IRS and replace its revenue generating taxation authority with a national sales tax of 23 percent, with a means-tested monthly sales tax rebate available to taxpayers who qualify No further action on this bill has been taken

The IRS has issued the luxury car depreciation limits for business vehicles placed in service in 2023 and the lease inclusion amounts for business vehicles first leased in 2023

Luxury Passenger Car Depreciation Caps

The luxury car depreciation caps for a passenger car placed in service in 2023 limit annual depreciation deductions to:

• $12,200 for the first year without bonus depreciation
• $20,200 for the first year with bonus depreciation
• $11,700 for the third year
• $6,960 for the fourth through sixth year

Depreciation Caps for SUVs, Trucks and Vans

The luxury car depreciation caps for a sport utility vehicle, truck, or van placed in service in 2023 are:

Excess Depreciation on Luxury Vehicles

If depreciation exceeds the annual cap, the excess depreciation is deducted beginning in the year after the vehicle’s regular depreciation period ends

The annual cap for this excess depreciation is:

• $6,960 for passenger cars and
• $6,960 for SUVS, trucks, and vans

Lease Inclusion Amounts for Cars, SUVs, Trucks and Vans

If a vehicle is first leased in 2023, a taxpayer must add a lease inclusion amount to gross income in each year of the lease if its fair market value at the time of the lease is more than:

• $60,000 for a passenger car, or
• $60,000 for an SUV, truck or van

The 2023 lease inclusion tables provide the lease inclusion amounts for each year of the lease

The lease inclusion amount results in a permanent reduction in the taxpayer’s deduction for the lease payments

Vehicles Exempt from Depreciation Caps and Lease Inclusion Amounts

The depreciation caps and lease inclusion amounts do not apply to: