House 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.
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