Fate of Tax Extenders Still Uncertain
The likelihood of passage for comprehensive tax reform has long been unclear, but uncertainty seems to now also surround the process for approval of tax extenders.
While the likelihood of passage of a comprehensive tax reform deal has seemed unlikely for a while now, it appears that same uncertainty now surrounds the process for approval of tax extenders as well.
Earlier this month the Senate Finance Committee easily passed a tax extenders package out of committee, and Senate Majority Leader Harry Reid (D-NV) has promised to bring the package to a vote when the Senate returns later this month. The legislation did not include any offsets to fund the extenders.
On April 8, House Ways and Means Committee Chairman Dave Camp (D-MI) marked up just the business-related extenders in his reform plan, including the R&D credit and expensing allowances under Section 179 of the tax code. There is concern in the tax community that Camp may attempt to just make permanent a few of the extenders, and presumably let the others expire.
“In past years, the fight has been between Democrats who wanted to pay for extending some of these types of temporary tax provisions and Republicans who didn’t want to, whereas that isn’t really the argument that we’re having this time around,” said Dustin Stamper, a director in Grant Thornton’s Washington National Tax Office in an interview with Accounting Today.
Bloomberg BNA reported on April 11 that there is still hope for many of the extenders not included in the Ways and Means mark-up last week. Chairman Camp told the publication that some extender provisions not included in his reform draft may still acted upon, but action may be slow.
Budget Committee Chairman Paul Ryan (R-WI) is a likely replacement as the Chair of the Ways and Means Committee in January, when Chairman Camp’s term expires and he retires from Congress. If Ryan takes the gavel, it is uncertain how much his view of tax reform may align with Camp’s proposal.
In an interview with Bloomberg BNA Judy Miller of the American Society of Pension Professionals and Actuaries said, “Camp’s plan is on its last leg. If Ryan takes over Ways and Means, he’ll want to have his own proposal on the basis of moving forward.”
An EY LLP and Tax Council survey of tax professionals [PDF] found that 20 percent expected a Ways and Means markup of the Camp plan in 2014, down from 25 perfect in February of this year. The report also found that just 10 percent of those surveyed believed that Senate Finance Committee Chairman Wyden would release a tax reform proposal in 2014. This number is down from 25 percent in February.