Tax Update (February 4)
|Tax Extenders Latest
Reports this week indicated that extenders are back on the top of the lists for tax writers. Senate Majority Leader Mitch McConnell’s (R-KY) Chief Tax Counsel, Jay Khosla, stated that while he views tax extenders as “easy” – versus fixing glitches and other problems in the Tax Cuts and Jobs Act, which congressional Democrats are blocking – there is no “natural vehicle” for moving extenders.
Khosla believes there is no chance of getting tax provisions into the upcoming omnibus appropriations bill that will hopefully settle the DHS/wall/shutdown discussions. He also believes extenders have insufficient support to move alone and the challenge remaining is what other potential tax provisions could be added to help move the package along. Currently, there are retirement and Internal Revenue Service (IRS) administration bills left over from last year but are unlikely to be locomotives for the extenders train.
The House Ways and Means Committee has yet to mark up any tax bills this session and Chairman Richard Neal (D-MA) must decide if he will mark up a clean extenders bill. While it likely remain clean on the House floor, it is unlikely Senate Finance Chairman Chuck Grassley (R-IA) and Senate leadership would attempt a clean bill, given that every Senator would want to attach their pet projects (ex: Warren “wealth tax”; Harris “$3TR middle class tax cut”; etc).
A large pro-tax extenders group with Finance Republican staff will meet this Friday (Feb.1) to emphasize the importance of passing the extenders package in 1Q19. A more detailed report will be released following the meeting. Chairman Grassley is intent upon getting the biodiesel extender passed and acknowledges that the other extenders should be included as well.
Livia R. Shmavonian, Tax Counsel for Sen. Bob Casey (D-PA), said Senate Democrats are pushing hard for a “one year forward/one year back” (2018 and 2019) package that would include the Alternative Fuels Tax Credit and more.
IRS Opportunity Zone Hearing
The IRS has rescheduled a hearing on proposed regulations for Opportunity Zones, slating it for Feb. 14.
It also scheduled a hearing for Feb. 13 on proposed regulations for a new tax on Global Intangible Low-Taxed Income.
Both hearings will be held at 10 a.m. in the auditorium of the IRS building at 1111 Constitution Avenue NW.
The Opportunity Zone hearing was originally scheduled for Jan. 10 but was canceled because of the partial government shutdown.