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Extenders, IRS administration, and retirement incentives top legislative agenda

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Tax Hot Topics newsletter Republican and Democratic tax writers have each signaled interest in an early tax bill if lawmakers can resolve the government shutdown.

The top priority will be retroactively extending for 2018 many of the “extender” tax provisions that expired at the end of 2017. Key extender provisions include:

  • Alternative fuel and biofuel credits
  • Energy-efficient new home credit
  • Energy-efficient commercial building property credit under Section 179D
  • Special expensing for film and television products
  • Three-year depreciation for racehorses
  • Seven-year cost recovery for motor sports entertainment complexes
  • Expensing for advanced mine safety equipment

Lawmakers could also look for bipartisan agreement on packages of retirement incentives and IRS administrative provision. Both parties and both chambers had similar drafts on these issues in the prior Congress and the drafts included many overlapping provisions. The IRS administrative provisions under consideration include codifying the taxpayer right to an independent Appeals and mandating that the IRS create online taxpayers portals. Key retirement provisions that could be considered include:

  • Allowing unrelated entities to participate in multiple employer 401(k) plans
  • Repealing the 70.5-year age cap on making contributions to an individual retirement account
  • Prohibiting plans from making loans to participants through credit cards and other similar arrangements
  • Extending the deadline for choosing to use the non-elective contribution safe harbor method

Republicans and Democrats still need to resolve the difference in priorities and objections to any provisions, but new House Ways and Means Committee Chair Richard Neal, D-Mass., is looking for early bipartisan wins, so a compromise is possible. Lawmakers could also consider attaching a limited number of technical corrections for tax reform, though Neal has indicated he wants to hold tax reform hearings first.

Contact:

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

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