Close
Close

House Republicans revise year-end tax package

RFP
Tax Hot Topics newsletterHouse Ways and Means Committee Chairman Kevin Brady (R-Texas) has released a revised year-end tax package. The new Retirement, Savings, and Other Tax Relief Act of 2018 (H.R. 88) is a slightly condensed version of its first iteration, introduced just after Thanksgiving, and is designed to garner enough buy-in from Republicans to advance it through the House. The bill was unsurprisingly met with an even frostier reception among Senate Democrats than its predecessor, indicating that some of the tax issues on Congress’s lame-duck agenda could be punted to next year.

The latest bill most notably drops a proposal to retroactively extend for 2018 the popular expired tax provisions known as extenders, which have long been unpopular with Republican lawmakers. It also includes an additional technical correction to the Tax Cuts and Jobs Act (TCJA) addressing issues related to attribution rules for controlled foreign corporations. The previous version of the bill contained five technical corrections to the TCJA, including making qualified improvement property eligible for bonus depreciation, fixing an error regarding the effective date for a new limit on the deduction for net operating losses and allowing the IRS to refund Section 965(h) overpayments.

Other proposals in the bill include disaster relief for areas affected by hurricanes Florence and Michael, the California wildfires, and typhoons in the Pacific Ocean, retirement and savings reforms and delays to implementation of certain taxes enacted under the Affordable Care Act. The bill also repeals the Johnson Amendment, which bars Section 501(c)(3) non-profits, including religious organizations, from endorsing political candidates.

With government funding partially set to expire on Dec. 21 and no spending agreement yet in sight, the opportunity for a year-end tax bill is diminishing. Some tax provisions may ultimately be tacked onto a spending bill, but more comprehensive legislation could have to wait until the next Congress. With a new, incoming Democratic majority in the House, however, the prospects of such legislation is uncertain.

Contact
Dustin Stamper

Managing Director
Washington National Tax Office
T +1 202 861 4144

Omair Taher

Senior Associate
Washington National Tax Office
T +1 202 861 4143

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.