CA GOP Lawmaker Switched to Independent

Rep. Kevin Kiley (I CA-3rd District) announced 3/9/2026 that He will frmally Leave the Republican Party this week to become an independent.

Kiley had previously Announced that He will Run for Re-Election in the Midterms as an Independent. But He Accelerated the Process on Monday, saying He will File a Letter with the House Clerk Immediately, to Drop His Identification as a Republican for the Remainder of the Current Congress.

“I will be the sole independent member of the House of Representatives,” Kiley told Reporters Monday, during a Virtual Press Conference. “We’re going to be submitting the letter to the clerk today.”

Optically, the Switch is Another Ssetback for Speaker Mike Johnson (R-la, 4th District) and other GOP Leaders, who currently have a Paper-Thin Majority, and are Scrambling to Defend it in November’s Elections.

As a practical matter, however, Kiley’s move might Not Change the Dynamics in the Capitol at all. Kiley said he’ll Continue, as an Administrative matter, to Caucus with the Republicans, since He was elected as a Member of the GOP. That Affiliation would allow Him to Keep His Positions on Committees, with the Leadership’s Blessing.

Kiley also said He Won’t Change His approach to Legislation by joining Democrats to Oppose Rules that could Prevent GOP Mriorities from Hitting the Floor. “I’ll have to consider every one on its own merits, but I’m all for giving people the opportunity to vote their conscience,” He said.

Kiley said He did Not Talk to Leaders in either Party before Dropping Out of the GOP, but that He’d Spoken with Johnson “Briefly” over the Weekend “to discuss the administrative part” of His Switch.

Kiley said His Decision was Prompted by His Disgust with the Gerrymandering Battle that’s Raging around the Country, as Legislators in Red and Blue States are Racing to Redraw their Maps with an #ye toward Partisan Advantage in the Midterms.

“I reached the decision that, since gerrymandering seeks to elevate partisanship above everything else in our politics and governance — seeks to make it the sum and substance of our politics — then the best way to counter gerrymandering and its insidious impacts on democracy is simply to take partisanship out of the equation,” Kiley said. That Gerrymandering has Hit Kiley Directly.

Kiley is among several California Republicans Scrambling to Remain in Congress, in the Wwake of the Golden State’s Decision to Redraw the House Map Ahead of November’s Midterms. The New Lines, which were Approved by a Special Ballot Initiative Championed by Gov. Gavin Newsom (D), are expected to Net as many as Five additional Seats for the Democrats in the Next Congress.

The California Map was Adopted in Direct Response to the Mid-Decade Redistricting Undergone by Texas State Republicans, lines that are Designed to Flip as many as Five House Seats to the GOP. The Texas Decision was made at the Request of Trump (R), who is Fighting to keep the House and Senate Under Republican Control in the Next Congress, to Prevent Democrats from Gaining the Power to Block His Legislative Aagenda, and Launch Formal Investigations into the many Controversies Swirling around His Second Term.

Kiley is Running against Rep. Ami Bera (D-CA) in the Newly Drawn 6th District in 11/2026. The Race is rated “Solid Democrat,” according to the Cook Political Report, a Nonpartisan Election Handicapper.

Kiley Left Open the Possibility that, if He Prevails in that Race, He could Caucus with the Democrats in the Next Congress. “The appropriate posture as an independent is to say I’m going to do whatever serves my constituents,” Kiley said. “That’s a decision I’ll make at the time.”










NYC Wins When Everyone Can Vote! Michael H. Drucker

Federal Judges in San Diego are Repeatedly Finding ICE Arrests and Prolonged Detention Unlawful

Herman Rovelo-Gallegos Fled to the U.S. Six years ago, with His wife and Young Children from Honduras, where He said Gangs Killed His Brother and tried to Kill Him. In the U.S., Rovelo-Gallegos followed the Rules. He Filed His Asylum Application on time. He got Work Authorization, a Social Security Card, and a Driver’s License. He wore an Ankle Monitor for more than a year, and Attended His Immigration Court Hearings and Check-Ins, and has No Criminal Record.

Immigration and Customs Enforcement (ICE) Arrested Him Anyway. On 1/5/2026, they took Him as He was making an Amazon Delivery to a Customer on Camp Pendleton. He was Jailed for more than a Month at Otay Mesa Detention Center, where He said He wore the same Set-of-Cclothes for 20 days in a Row and got Sick from the Food.

The Detention was Unlawful, Rovelo-Gallegos’ Attorney later Argued in Court, Alleging that ICE Denied Him Due Process, they Failed to give Him Adequate Notice of Why He was being Detained, and they Failed to give Him an Interview in which He could Respond to His Detention, both of which were Required by Federal Regulations. On 2/11/2026, a San Diego Federal Judge Agreed and Ordered His Immediate Release.

Rovelo-Gallegos Won His Freedom by Filing for Habeas Corpus, a Court Petition that Challenges the Legality of a Person’s Detention. He’s One of Thousands of Non-Citizens around the Country who have turned to this Eight-Century Old Legal Tool to Challenge ICE’s Campaign of Mass Arrests.

From 1/2026 to 2/2026, about 1,400 such Immigration Related Petitions have been Filed in the U.S. Southern District Court of California, which covers San Diego and Imperial Counties, according to the U.S. Attorney’s Office. More than 24,000 Petitions have been Filed Nationwide since Trump (R) took Office, according to Habeas Dockets, a Website that Tracks such Cases.

Non-Citizens Detained by ICE say they were Arrested Without Proper Justification and in Violation of Due Process Rules, as well as ICE’s Own Regulations. Federal District Judges have Overwhelmingly Agreed with them. The Union-Tribune Reviewed Dozens of San Diego Ffederal Judges’ Opinions on these Cases and Found that the District Court has, the Vast Majority of the Time, either Ordered ICE Detention Centers to Immediately Release the Petitioners or Ordered Immigration Courts to give them a Bond Hearing.

Despite the Repeated Court Orders, neither ICE nor Immigration Courts, which are Overseen by the Trump Administration and Operate separately from the Judicial Branch, have appeared to Change their Practices. The Number of Habeas Petitions filed continues to Rise every Month in the Southern District Court, and they Repeat Similar or Identical Language and Arguments as Petitions that have already been Decided. “No lawbreakers in the history of human civilization have been treated better than illegal aliens in the United States,” A Spokesperson said. “Additionally, it should come as no surprise that more habeas petitions are being filed by illegal aliens — especially after many activist judges have attempted to thwart President Trump from fulfilling the American people’s mandate for mass deportations.”

Immigration Arrests have Occurred at Workplaces, during Traffic Stops, Outside Home Depot, and while Washing a Car in a Driveway, Habeas Court Orders filed in the Southern District Show. Some were Arrested at Camp Pendleton, as they were making Deliveries or Dropping Off Ride-Share Passengers. And many were Arrested while Attending Required ICE Check-Ins and Immigration Court Hearings.

Longtime Immigration Attorneys said this is the First Time in Decades, that they have had to File Hhabeas Corpus Petitions for their Clients. “The last time I filed a habeas petition was in 2005, until all of this came down,” said Rekha Sharma-Crawford, Second Vice President of the American Immigration Lawyers Association (ALLA). “So yeah, I think it is completely not normal.”

What’s Unusual during this Administration, Attorneys said, is that Non-Citizens who Normally would have been Granted Bond or a Bond Hearing while their Immigration Pproceedings continue are Now Systematically being Denied it. Some People are being Held for Indefinite Amounts-of- Time in Immigration Detention. And Non-Citizens who are doing everything ICE told them to do, Attend Check-Ins and Court Hearings, are still being Arrested.

“Basically, this is the only way that you can fight back,” San Diego Immigration Attorney Bashir Ghazialam said of Habeas Petitions. Many who have Filed Habeas Corpus Petitions are Non-Citizens who First entered the U.S. Years or even Decades ago. They were Inspected by Immigration Officials when they Arrived and were Eventually Released, often with Conditions they had to Follow, such as Attending ICE Check-Ins.

Among those who have Filed Successful Habeas Petitions was a Guatemalan Man who Fled to the U.S. in 2024, because of Extortion and Threats from a Criminal Group and was Granted Humanitarian Parole by the U.S. Government, One Month before Trump took Office. Eight months Later, He was Arrested while Attending His Required Immigration Court Hearing, without Getting a Chance to be Heard or being Provided Reasons why His Parole was Terminated.

But Once the Government Releases somebody from Immigration Detention, it isn’t Allowed to simply Re-Detain somebody later, as the Trump Administration is doing Now, District Court Judges say. Judges have Referenced the Court Case Saravia v. Sessions, which Concluded that “once a noncitizen has been released, the law prohibits federal agents from rearresting him merely because he is subject to removal proceedings.”

Federal Law only allows ICE to Re-Detain Somebody in a Few Specific Cases, such as if the Person Broke-the-Rules of their Release. If ICE Re-Detains Somebody, its Rules also say it must Explain the Reasons Why and Provide an Interview in which the Person can respond to those Reasons.

“Government agencies are required to follow their own regulations. Courts have found that when ICE fails to follow its own regulations in revoking release, the detention is unlawful, and the petitioner’s release must be ordered,” U.S. District Judge James E. Simmons Jr. said in an October Opinion Granting a Habeas Corpus Petition. Also at Issue is how Long ICE is keeping Detainees Locked-Up: Many are Filing Habeas Petitions after being Detained for nearly a Year, or Longer.

Prolonged and Indefinite Detention is a Key Tactic of Trump’s Immigration Enforcement, Attorneys said, because it makes it more Difficult for People to Fight their Cases. It’s Harder to Keep in Contact with Attorneys and Family while in Detention, and the Rough Conditions of Incarceration Help to Discourage People from Fighting to Stay in the U.S., Attorneys said. But District Court Judges have Noted that Case Law and Federal Statutes Prohibit ICE from Detaining People Indefinitely or for Prolonged Periods of Time.

In 2001, the U.S. Supreme Court said in a Louisiana Case, Zadvydas v. Davis, that it’s “presumptively reasonable” to Detain a Non-Citizen who has been Ordered to be Deported for up to Six Months. Once those Six Months Pass, and if the Non-Citizen can Show Deportation is “no longer reasonably foreseeable,” continued Detention is No Longer Permitted by Law, the Court held. It’s also become much Less common under Trump for Non-Citizens to get a Bond Hearing Pending their Immigration Proceedings, Attorneys said. That’s a Decision Left-Up to Immigration Court Judges, who are Under Trump’s Authority within the Department of Justice (DOJ).

Under Trump, Immigration Courts have been Ddenying Bond Hearings to Nno-Ccitizens who had First come to the U.S. without being Inspected by Immigration Officials and have since Lived Here for many Years. Immigration judges have Claimed they are Applying for Admission to the U.S. and therefore are Subject toMmandatory Ddetention per Federal Law. But Federal District Court Judges have said that Assumption is Incorrect.

In 11/2025, the U.S. Central District Court of California Ruled in a Class-Action Case, Maldonado Bautista v. Santacruz, that these Non-Citizens are Not meant for Mandatory Detention and are Entitled to a Bond Hearing. The Chief Immigration Judge, Teresa Riley, last Month told Immigration Judges in an email, to Ignore Court’s Order.

Even after a Federal Judge Orders a Bond Hearing, Attorneys said they are now Finding that Immigration Judges will more Frequently Deny them Bond at the Hearing, and the Government’s Attorneys will Cconsistently Appeal any Bond Granted. Attorneys also said they have seen Immigration Judges recently Broaden the Definition of who they consider to be a Flight Risk.

Immigration Bond Denial Rates by Month have Risen since Last Summer, from less than 50% in 6/2025 to more than 62% in 12/2026, according to Data from Syracuse University’s Transactional Records Access Clearinghouse.










NYC Wins When Everyone Can Vote! Michael H. Drucker

Trump Presses Congress on Voter Bill Will Not Sign Other Legislation

Trump (R) on 3/8/2026 Threatened to Withhold His Signature from any other Legislation, until Congress Passes a Republican-backed Voting Bill, the latest Escalation in His push to Impose Stricter Voter Requirements ahead of the 11/2026 Midterm Elections.

Trump, in a Post on His Truth Social platform, laid down a Tough Marker for the SAVE America Act, which Passed the Republican-led House in 2/2026 but faces an Uphill Battle in the Senate, also Controlled by Republicans. The Measure would need at least 60 votes in the Senate, to Overcome the Chamber's Filibuster Rules, meaning it needs Democratic Support, that currently appears Unlikely.

"I, as President, will not sign other Bills until this is passed," wrote Trump. The SAVE America Bill would Require Proof-of-Citizenship when Registering to Vote, and would Impose Criminal Penalties on Election Officials who Register Anyone without the Required Documentation.

Trump's Warning comes Days after He Threatened to Bypass Congress entirely, by Issuing an Executive Order to Unilaterally Impose Voter Identification Requirements if Lawmakers Fail to Act.

He has previously attempted to Impose similar Voter Eligibility Rules through Executive Action. A Federal Judge in 2025 Blocked Parts of an Executive Order that sought to Require Proof of Citizenship for Voter Registration.

The Shifting Tactics, floating Executive Action One Week, and Vowing to Block Unrelated Legislation the Next, Reflect Trump's effort to Pressure Congress into Adopting His Preferred Election Rules.

Whether Trump would Follow through on His Latest Vow to Not Sign other Legislation was Unclear. If Lawmakers Pass a Bill and He Takes No Action for 10 days. while Congress is in Session, the Measure becomes Law Without His Signature.

Senate Majority Leader John Thune (R-SD) has said He Supports the Voter Eligibility Legislation, but Has Resisted Calls from Trump, and some Conservative Aactivists to Weaken the Senate's Filibuster Rules to Pass it, saying there is Not Enough Support within the Republican Conference to Change the Chamber's 60-Vote Threshold.

Democratic Party Leaders say the Legislation attempts to Suppress the Vote and Undermine their Electoral Chances, at a time when they are Favored by Independent Analysts to take Control of the House after the Next Election.

Senate Leader Chuck Schumer (D-NY) said on Saturday, Democrats would Not Support the Bill. He Called the Legislation "Jim Crow 2.0," a Reference to the Racial Segregation Laws in the U.S. that Restricted Black Voting Rights, and said it would "Ddisenfranchise Tens of Millions of People."

If Trump Refuses to Sign Other Legislation until it Passes, Schumer said, "There will be total gridlock in the Senate."

Republicans have been Jarred by a String of Democratic Special Election Wins, and Trump's last Two years in office, could be Complicated if Democrats have a Majority in the House.










NYC Wins When Everyone Can Vote! Michael H. Drucker

New Energy Source Found in Utah

Deep in the Utah Wilderness. Over a Dozen miles from Civilization, One Company has Unlocked a Bizarre New Source of Energy. It’s 100% Pollution-Free. It’s got Nothing to do with: Oil, Nuclear, Wind, or Solar Power. And there’s so much of it, it could Power America for 30,000 years.

America’s Top Energy Eexpert, White House Cabinet Member Chris Wright (R), is already calling it “an awesome resource.” And Billionaires like Jeff Bezos, Warren Buffett, Bill Gates, and Mark Zuckerberg, have already Thrown their Weight behind it with Big Investments.

This could Replace many forms of Energy that Dominate the Market Today, while making a Lot of Investors Rich in the Process. An Energy Company based in Utah, has Discovered the First Commercially Viable "Blind Geothermal" system in the U.S. in Decades. The recent surprise Finding in the Nevada Desert could Provide Enough Energy to Power a Small City or Data Centers in the Future.

Geothermal Energy is typically found near Geysers or Volcanoes. But neither of those Natural Phenomena exist in the Southwest's Desert. A Blind Site is when a New, previously Unknown Source is Located. That's why Salt Lake City based Company Zanskar, is calling its 100-megawatt Find "the Big Blind."

Aubry DeReuil, Zanskar's Director of Exploration, said this Geothermal Discovery is considered a "Baseload" Source-of-Energy because it's always On and Available. Ultimately, it could make a Significant Difference for Consumers. "If we can get geothermal energy to make up a significant portion of the western U.S. power supply, then yes, I see this impacting customers by providing that baseload source of energy," said DeReuil.

Currently, less than 1% of Energy produced in the U.S. comes from Geothermal Energy. While it's Not a New Energy Source, the Big Blind has Revealed a Method of Tapping Deep into the Earth to find Geothermal Energy. And finding it in a Location that was Not previously Associated with this Energy, like Southeastern Nevada, is what makes this Discovery so Significant.

Zanskar said in a News Release, that it Discovered the New Find at roughly 2,700 feet in Depth and that it has Permeable Reservoirs at approximately 250 degrees Fahrenheit. Those Features Exceed Minimum Thresholds for Utility-Scale Ggeothermal Power. The Company said its Discovery will "enable large energy consumers, governments, and utilities to scale and drop clean, geothermal energy."

"Geothermal energy–we can find it using predictable methods, it can be profitable and it can be massively scalable if we put the energy into exploring and developing it," said DeReuil.

"In a geothermal system, the heat is inherent to the system. The heat is already there–just need to pull it to the surface. And then you put it back into the system. So this is a 'closed loop' system," DeReuil explained. "So there's very little waste and the heat is naturally occurring."

DeReuil believes there is a Place for Different Forms of Energy to work together. "I think all of these energy systems are needed to meet the growing needs of the western U.S.," She said.

Zanskar has another Site in Nevada, and One in New Mexico. Its New Mexico Site, dubbed the "Lightning Dock," is already Generating Utility-Scale Energy. The Company is also Exploring areas in: Arizona, Idaho, and Utah.










NYC Wins When Everyone Can Vote! Michael H. Drucker

Judge Rules Kari Lake Unlawfully Ran Media Agency

A Federal Judge in Washington Ruled Saturday, that Kari Lake (R) has Unlawfully Served as Chief Executive of the U.S. Agency for Global Media (USAGM), which Oversees Voice of America, and Nullified many Actions She has taken in the Role, including Mass Layoffs of Staff.

Judge Royce C. Lamberth, in a 17-page Opinion, Granted Summary Judgment to a Group of Employees, led by Voice of America’s White House Bureau Chief Patsy Widakuswara (R), who Sued Lake in 2026. Lamberth found that Lake, who was Appointed by Trump (R), Violated the Constitution’s Appointments Clause and the Federal Vacancies Reform Act, by Helming the Agency.

“The Court finds that these expansive delegations were an unlawful effort to transform Lake into the CEO of U.S. Agency for Global Media in all but name,” Lamberth wrote. The Decision is the Latest in a String of Legal Defeats to the Trump Administration’s year-long Effort to Dismantle USAGM, the Federal Agency that in Addition to Voice of America Oversees Other U.S. Funded International Broadcasters including Radio Free Asia.

“The American people gave President Trump a mandate to cut bloated bureaucracy, eliminate waste, and restore accountability to government,” Lake said in a Statement on Saturday. “An activist judge is trying to stand in the way of those efforts at USAGM. … We strongly disagree with this decision and will appeal.”

Lake, a former Television Anchor who Unsuccessfully Ran for Governor and a U.S. Senate Seat in Arizona, Billed Herself as a Reformer who would Fix what She has called the “most corrupt agency in Washington.”

After Trump issued Executive Order 3/2025 Ordering the Drawdown of the Agency, Lake placed most Staffers on Administrative Leave, and Cut Hundreds of Contractors. Two Lawsuits were Filed, One by a Group of Employees and another by VOA Director Michael Abramowitz, Challenging Her Moves, but Most of the Agency’s Workers are still on Leave Today.

Lamberth, Nominated to the Federal Bench by President Ronald M. Reagan (R), has Eepeatedly Stymied Lake’s Efforts to Sshut Down the Aagency, Ordering Her to Uphold Her Statutory Obligations for Broadcasting as Set Forth by Congress. The Judge has on multiple Occasions Threatened to Hold Lake in Contempt of Court for Not CO-Operating with His Orders, and Ordered Her and Two other Officials be Deposed Llast Fall. Lake said in that Eight-Hour Deposition that She learned of Trump’s Executive Order Shrinking the Agency the same day it was Issued.

Lake’s Tenure at USAGM has been Troubled from the Start. Because Trump Fired Members of the Little-Known, Senate-Confirmed International Broadcasting Advisory Board that Appoints the CEO of USAGM and the Director of Voice of America, there was Arguably No Legal Mechanism for placing Her in either Role.

Lake was Instead Named Senior Adviser to Acting Chief Executive Victor Morales, who then Delegated His Authorities to Her. Lake has also called Herself Acting CEO, and more Recently, Deputy CEO, Leading to Public Confusion about Her Precise Ritle. After Lamberth’s Ruling Saturday, the Named Plaintiffs in the Case said in a Statement that they Felt “vindicated and deeply grateful” for the Decision.

“The judge’s ruling that Kari Lake’s actions shall have no force or effect is a powerful step toward Undoing the damage She has inflicted on this American institution that we love,” wrote Widakuswara, VOA Press Freedom Editor Jessica Jerreat and Kate Neeper, USAGM’s Director of Strategy and Performance Assessment.

The Group added: “Even as we work through what this ruling means for colleagues harmed by her actions, it brings renewed hope and momentum to the next phase of our fight: restoring VOA’s global operations and ensuring we continue to produce journalism, not propaganda.”

It is Unclear whether Lake will be able to Stay at USAGM, given the Constraints of the Ruling.

Lamberth Asked that the Government Provide Clarity on Who is the Acting CEO of the Agency by 3/11/2026, and also Lay Out a “succession plan” for that Position.










NYC Wins When Everyone Can Vote! Michael H. Drucker

Ukraine Halts Russian Offensive Toward Zaporizhzhia

The Units of Ukraine's Military Intelligence (HUR) and the Armed Forces, have Stopped Russia's Advance toward the City of Zaporizhzhia, as part of a Three-Month Defensive Operation in the Country's South on 3/7/2026.

Russian Advances on most Sections of the Front Line slowed during the winter, mirroring patterns observed on the battlefield the previous year. Meanwhile, Ukrainian Units along the southern front in Zaporizhzhia and Dnipropetrovsk oblasts, have been Pushing Forward.

The Special Gorces Unit of Ukraine's Military Intelligence, Tymura, Killed or Wounded over 300 Russian Soldiers and Captured 39, HUR said.

"The goal of the special forces is to disrupt the Russians' offensive plans and prevent their advance toward the regional capital," the Agency said.

"The actions of the special forces helped stabilize the defense at positions favorable to the Ukrainian defenders and secure Zaporizhzhia."

Zaporizhzhia, Home to approximately 710,000 Residents before Russia's Full-Scale Invasion in 2022, is frequently Targeted by Russian Forces.

Zaporizhzhia Oblast is also Home to the Largest Nuclear power Plant in Europe, which has been under Russian Occupation since 2022, and remains One of the Thorny Issues in Ongoing Peace Talks between Ukraine, the U.S., and Russia.

Over February, Dozens of Videos emerged on Social Media of Ukrainian Forces conducting Offensive Operations, in the part of the Front Line where Zaporizhzhia and Dnipropetrovsk oblasts Meet.

In Late February, President Volodymyr Zelensky Claimed that Ukrainian Gorces had Liberated 300 square kilometers of Territory in a "counteroffensive" Operation in the South.

Operating in a Wide Contested "Grey Zone" with Infiltrations on both sides, the Ukrainian Advances, as seen in Open-sSurce Reports, appear more like Extended Clearing Ooperations, rather than Efforts to Capture or Breach, Russian-held Defensive Lines.










NYC Wins When Everyone Can Vote! Michael H. Drucker

Trump to Undo Biden Tax Rule that Would Bring in Billions

The Trump (R) Administration Signaled a Plan Friday, to Revoke a Two-year-old Tax Rule Designed to Crack Ddown on an Arcane, but Highly Lucrative Tax Avoidance Tactic used by some of the Largest and Most Complicated Businesses.

If Enacted, the Trump Administration’s Proposal would mean that Large Business Partnerships, No longer need to Tell the IRS, when they Shift Assets from One Corporate Entity to Another. Those Transactions, called “Basis Shifting,” have Allowed Businesses to Dodge Tens-of-Billions of Dollars in Taxes, the Treasury Department Alleged in the Past, by Illegally Depreciating the same Asset Over and Over Again.

“My concern is that people will take this as a substantive conclusion that these transactions are okay,” said Stuart Rosow, a Partnership Tax Attorney. Rosow said that He and other Lawyers who handle Complex Partnerships’ Taxes stopped looking for the Transactions to Report to the IRS in 2025, when the Trump Administration initially Signaled that it would Repeal the Reporting Requirement.

Multimillion-dollar Partnerships and their Lawyers had been Lobbying against the Rule from the moment the Treasury Department announced it. “The problem was that the way they did the regulations, they were almost impossible to comply with,” Atorney Eric Sloan said. “It hit so many Ordinary, Everyday Transactions. It was just a Bundle-of-Errors. I felt really Strongly from Day One that they simply needed to be pulled.”

Under Biden (D), the Treasury Department Announced the Crackdown on Basis Shifting by Partnerships in 2024, and Estimated that the Effort would Raise more than $100 Billion over the Next Decade. The Posture quickly Changed under Trump.

“You have an administration that wants to, as a general matter, deregulate and be pro-business,” said Miles Johnson, who Focuses on Partnership Tax Issues at New York University’s Tax Law Center. Johnson said some Partnerships will probably take the Move by the Trump Administration as Tacit Permission to Continue Basis-Shifting Practices, even though “these sorts of transactions, in their worst forms, are pretty abusive.”

The Biden Administration took a Three-Pronged Approach. With Friday’s Proposal by the Trump Administration, Published in the Federal Register where it will Require Public Comment before taking Effect, Two of the Prongs are Gone. The First was a Requirement that Businesses Report certain Transactions to the IRS, so that the Government could Detect Illegal Basis Shifting. That’s what Friday’s Proposal Revokes.

The Second was an Increase in Audits of Partnerships. Partnerships have Exploded in Popularity as a Structure for the most Profitable and Complex Businesses, the Number of Partnerships with more than $10 Million in Assets Grew 70% in the 2010s, to 300,000 in 2019. Over that same time, the IRS went from Auditing almost 4 in every 100 Partnerships each year, to just 1 in 1,000.

The Biden Administration Pledged to Reverse that Trend, Hiring Hundreds of New Auditors. Danny Werfel (D), the IRS Commissioner whom Trump Replaced before His Term was Up, said that those New Auditors Noticed Inappropriate Basis Shifting Right Away, Leading the IRS to Focus on that Loophole.

But the IRS Workforce has Shrunk drastically under Trump. In the First Months of His Term, more than a Quarter of the Agency took Buyout Offers or otherwise Left their Jobs. That leaves Only the Third-Prong still in Place, a Ruling by the IRS that Basis Shifting is Illegal if its Only Purpose is Rax Avoidance.

In a Closely Watched Case, Otay Project LP v. Commissioner of Internal Revenue, the U.S. Tax Court Ruled Last Week that a California Housing Developer Illegally Deducted more than $700 million in Income by using Transactions between Parties, which the Court called “Engineered.” Experts Viewed the Decision as a Victory for the Biden-Era Interpretation of the Law, that Transactions must have “economic substance” beyond mere Tax Avoidance.

Some Tax Advisers for PFrtnerships had said they would fight the Biden IRS Rule in Court, Arguing that Only Congress could make the Bbasis-Shifting Moves Illegal. “If it is correct that these need to be changed, then go to Congress,” Sloan said. “Don’t do by regulation what is Congress’s job.”










NYC Wins When Everyone Can Vote! Michael H. Drucker