TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Tuesday, February 2, 2016

House Holds Hearing Today On Delivering Growth And Opportunity For All Americans

House LogoThe House Ways & Means Committee holds a hearing today on Reaching America’s Potential: Delivering Growth and Opportunity for All Americans:

February 2, 2016 in Congressional News, Tax | Permalink | Comments (0)

Thursday, January 28, 2016

Senate Holds Hearing Today On Tax-Favored Retirement Plans

Senate LogoThe Senate Finance Committee holds a hearing today on Helping Americans Prepare for Retirement: Increasing Access, Participation and Coverage in Retirement Savings Plans:

  • Alicia Munnell (Boston College)
  • John J. Kalamarides (Prudential Financial)
  • Thomas Barthold (Joint Committee on Taxation)

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Background Relating To Tax-Favored Retirement Saving And Certain Related Legislative Proposals (JCX-3-16):

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January 28, 2016 in Congressional News, Tax | Permalink | Comments (0)

Tuesday, January 12, 2016

Joint Tax Committee Releases List Of Expiring Federal Tax Provisions, 2016-2025

Joint Tax CommitteeThe Joint Committee on Taxation has released its annual List of Expiring Federal Tax Provisions 2016-2025 (JCX-1-16):

This document ... prepared by the staff of the Joint Committee on Taxation, provides a listing of Federal tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in 2016-2025 (with references to the applicable section of the Internal Revenue Code of 1986 or other applicable law).

For purposes of compiling this list, the staff of the Joint Committee on Taxation considers a provision to be expiring if, at a statutorily specified date, the provision expires completely or reverts to the law in effect before the present-law version of the provision. A suspension or deferral of the effective date of a provision is not considered an expiration. Certain provisions terminate on dates that refer to a taxpayer’s taxable year and not a calendar year.

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January 12, 2016 in Congressional News, Tax | Permalink | Comments (0)

Monday, December 28, 2015

Hoffer & Walker:  The Tax Court And The Administrative State — Congress Responds To The D.C. Circuit

Hoffer & WalkerFollowing up on my previous posts (links below):  TaxProf Blog op-ed, The Tax Court and the Administrative State: Congress Responds to the D.C. Circuit’s Decision in Kuretski, by Stephanie Hoffer (Ohio State) & Christopher J. Walker (Ohio State):

Congress recently passed its annual “tax extender” legislation: the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). Although the bulk of the PATH Act extends a variety of tax breaks, as Daniel Hemel notes over at the University of Chicago Law School Faculty Blog the last few pages of the more-than-two-hundred-page bill attempt to clarify the position of the United States Tax Court within the modern administrative state.

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December 28, 2015 in Congressional News, Tax | Permalink | Comments (0)

Hickman:  What Is The Tax Court? Congress Speaks.

Hickman 2014 2Following up on my previous posts (links below):  TaxProf Blog op-ed, What Is The Tax Court? Congress Speaks (or Attempts To, Arguably Unsuccessfully), by Kristin Hickman (Minnesota):

In the latest round in the Kuretski brouhaha, the new omnibus appropriations bill passed by Congress and signed by President Obama last week adds the following text to the Internal Revenue Code:

The Tax Court is not an agency of, and shall be independent of, the executive branch of the Government.

What does this amendment mean, and why does it matter—or not?

Exactly what the amendment really accomplishes is unclear.  The amendment arguably speaks to two ongoing conversations about the Tax Court.  One is constitutional, concerning separation of powers principles.  The second is statutory, addressing the interplay of the Internal Revenue Code and the Administrative Procedure Act.  In the end, however, the amendment offers little to resolve either one.

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December 28, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, December 23, 2015

Lederman:  On The PATH To A More Judicial Tax Court

Ledderman (2016)Following up on Friday's post, Tax Extenders Bill Puts Tax Court In Constitutional Limbo:  TaxProf Blog op-ed:  On the PATH to a More Judicial Tax Court, by Leandra Lederman (Indiana-Bloomington):

The recently enacted Protecting Americans from Tax Hikes (PATH) Act of 2015 includes a subtitle containing several sections addressing the U.S. Tax Court. This post focuses primarily on Congress’s “clarification” of what the Tax Court is not, but it also briefly addresses some changes the new law makes to Tax Court administration.

Since 1969, when Congress enacted Internal Revenue Code (Code) section 7441, making the Tax Court an Article I court, the Tax Court has faced issues resulting from its lack of a clear place in the federal government structure. The clarifying amendment in the PATH Act adds a third sentence at the end of section 7441 (highlighted in bold below), which makes the provision read as follows:

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December 23, 2015 in Congressional News, New Cases, Scholarship, Tax | Permalink | Comments (0)

Saturday, December 19, 2015

President Obama Signs Omnibus Bill With $680 Billion In Tax Cuts, 70% For Democratic Priorities

President Obama yesterday signed the omnibus appropriation bill after its approval by the House (318-109) and Senate (65-33).  The bill includes $680 billion in tax extenders and other tax changes (according to Lily Batchelder, $236 billion for Democratic priorities, $97 billion for Republican priorities, and $347 billion for bipartisan priorities).

Press and blogosphere coverage:

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December 19, 2015 in Congressional News, Tax | Permalink | Comments (1)

Saturday, December 12, 2015

Obama Pick For Top Tax Lawyer Stalls On Pastor-Politics Issue

CanoFollowing up on Wednesday's post, Tax Lawyers Urge Rapid Confirmation Of Cono Namorato As Assistant Attorney General For The Tax Division:  Chicago Tribune, Obama Pick for Top Tax Lawyer Stalls on Pastor-Politics Issue:

President Barack Obama's nominee to serve as the top U.S. tax prosecutor has stalled over an obscure letter he wrote seven years ago questioning the legal tactics of a group that wants pastors to speak out on politics.

The standoff involves Cono Namorato, a Washington defense attorney and former government lawyer, who was nominated Feb. 24 to serve as the assistant attorney general over the Justice Department's tax division. The outcome will determine the leadership of the division's 370 criminal and civil lawyers, who pursue offshore tax evasion and other investigations.

Namorato, 73, won bipartisan praise at his July 22 hearing in the Senate Judiciary Committee, but never got a confirmation vote from that panel. In response, a group of former Justice Department and Internal Revenue Service officials wrote this week to urge the committee to approve Namorato. ...

Behind the scenes, some members of the judiciary panel have concerns. After Namorato's hearing Republican Sen. Charles Grassley of Iowa, the panel's chairman, asked him about a 2008 letter he co-signed that urged the IRS to investigate the actions of lawyers at the Alliance Defense Fund, based in Scottsdale, Arizona.

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December 12, 2015 in Congressional News, Tax | Permalink | Comments (1)

Wednesday, December 9, 2015

Joint Tax Committee Releases Tax Expenditure Estimates for 2015-2019

Joint Tax CommitteeJoint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2015-2019 (JCX-141-15):

Tax expenditure analysis can help both policymakers and the public to understand the actual size of government, the uses to which government resources are put, and the tax and economic policy consequences that follow from the implicit or explicit choices made in fashioning legislation. This report on tax expenditures for fiscal years 2015-2019 is prepared by the staff of the Joint Committee on Taxation (“Joint Committee staff”) for the House Committee on Ways and Means and the Senate Committee on Finance. The report also is submitted to the House and Senate Committees on the Budget.

As in the case of earlier reports, the estimates of tax expenditures in this report were prepared in consultation with the staff of the Office of Tax Analysis in the Department of the Treasury (“the Treasury”). The Treasury published its estimates of tax expenditures for fiscal years 2014-2024 in the Administration's budgetary statement of February 2, 2015. The lists of tax expenditures in this Joint Committee staff report and the Administration's budgetary statement overlap considerably; the differences are discussed in Part I of this report under the heading “Comparisons with Treasury.”

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December 9, 2015 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0)

Tuesday, December 1, 2015

House And Senate Hold Hearings Today On The OECD Base Erosion And Profit Shifting (BEPS) Project

Congress (2015)The Subcommittee on Tax Policy of the House Ways and Means Committee and the Senate Finance Committee host hearings today on The OECD Base Erosion and Profit Shifting (BEPS) Project:

House Witnesses (with links to their testimony):

Senate Witnesses:

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December 1, 2015 in Congressional News, Tax | Permalink | Comments (0)

Monday, November 2, 2015

As Speaker, Paul Ryan Can Finally Get Tax Overhaul Done

Wall Street Journal, As Speaker, Paul Ryan Can Finally Get Tax Overhaul Done:

Washingtonians agree almost universally on two political phenomena: The House Republican conference is ungovernable, and tax reform is dead.

That was yesterday. In a matter of days we will have Speaker Paul Ryan, whose track record shows a man that may make the impossible happen. This is based on three key assets.

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November 2, 2015 in Congressional News, Tax | Permalink | Comments (2)

Tuesday, October 27, 2015

Budget Deal Changes Partnership Tax Audits

Wall Street Journal, IRS Would More Easily Audit Large Partnerships Under Proposal; Provision in Budget Deal Would Make It Easier to Audit Private-Equity Firms, Hedge Funds:

The Internal Revenue Service would have an easier time auditing large partnerships, including private-equity firms and hedge funds, under a provision in the bipartisan budget deal announced late Monday night.

The proposal, built on ideas from both parties, would revamp a 33-year-old law that sets the rules for partnership audits and requires the IRS to pass additional taxes to each of the partners. That task has proven difficult for the IRS and has made the biggest and most complex multitiered partnerships extremely tough to audit.

A Government Accountability Office study last year found the IRS audited just 0.8% of large partnerships—those with at least 100 partners and $100 million in assets—compared with a 27.1% audit rate for corporations with at least $100 million in assets. Most of those partnership audits resulted in no additional taxes, and the GAO said it wasn’t sure whether that was because of high compliance or the agency’s inability to find noncompliance.

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October 27, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (0)

Thursday, October 8, 2015

Senate Launches Volkswagen Tax Fraud Probe

VW2Senate Finance Committee Chair Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Oregon) sent a letter Tuesday to Volkswagen asking whether the automaker defrauded the IRS in obtaining federal tax credits despite the installation of “defeat devices” in diesel passenger cars.

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October 8, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, October 7, 2015

House Holds Hearing Today On The Rising Costs Of Higher Education And Tax Policy

House LogoThe Subcommittee on Oversight of the House Ways & Means Committee holds a hearing today on The Rising Costs of Higher Education and Tax Policy.  In connection with the hearing, the Joint Committee on Taxation has released Background and Present Law Related to Tax Benefits for Education (JCX-133-15):

This document ... includes a description of present law and analysis relating to tax benefits for education. Present law includes a variety of provisions that provide tax benefits to individual taxpayers for education expenses.

Figure 3

Table 4

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October 7, 2015 in Congressional News, Legal Education, Tax | Permalink | Comments (3)

Thursday, October 1, 2015

Federal Tax Law And Issues Related To The Commonwealth Of Puerto Rico

Senate LogoThe Senate Finance Committee held a hearing yesterday on Financial and Economic Challenges in Puerto Rico.  In connection with the hearing, the Joint Committee on Taxation released Federal Tax Law And Issues Related To The Commonwealth Of Puerto Rico (JCX-132-15):

This document ... provides an overview and analysis of Federal tax laws relating to the Commonwealth of Puerto Rico and other U.S. territories, summarizes recent prominent changes in Puerto Rican tax law, and describes the economy of Puerto Rico, in part by comparison to economic measures for the United States as a whole. ...

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October 1, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, September 16, 2015

Senate Holds Hearing Today On Identity Theft, Tax Refund Fraud, And The IRS's Authority To Regulate Paid Tax Return Preparers

Senate LogoThe Senate Finance Committee holds an Open Executive Session today at 10:00 EST to consider an Original Bill to Prevent Identity Theft and Tax Refund Fraud.  Among the bill's twenty provisions is a grant of authority to the Treasury Department and the IRS authority to regulate paid tax return preparers (at a cost of $135 million over ten years).

September 16, 2015 in Congressional News, Tax | Permalink | Comments (0)

Thursday, August 6, 2015

Senate Releases Summaries of Tax Extenders Bill; Joint Tax Committee's Dynamic Scoring Says Bill Will Cover 11% Of Its Costs

The Senate Finance Committee yesterday released updated summaries (here and here) of the committee-passed tax extenders legislation (S. 1946). In connection with the bill, the Joint Committee on Taxation released A Report To The Congressional Budget Office Of The Macroeconomic Effects Of The “Tax Relief Extension Act Of 2015”.

Bloomberg, Tax Cut Pays Part of Its Way in Test of Republican Scoring:

A bipartisan U.S. Senate bill that would revive and extend dozens of lapsed tax breaks would spur economic growth and cover about 11 percent of its own costs, according to Congress’s nonpartisan scorekeeper.

The analysis released Tuesday is an early test of Republicans’ focus on what’s known as dynamic scoring. It refers to the principle that legislation can be significant enough to change the size of the economy and affect the U.S. budget.

Republicans say that’s a more accurate way to study bills, and they’ve changed budget rules to include the analyses. Democrats are dubious, citing the uncertainty of projections.

Jared Bernstein (Center on Budget and Policy Priorities), Dynamic Scoring in Action: Unwarranted Certainty:

Jared

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August 6, 2015 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0)

The IRS Scandal, Day 819

IRS Logo 2Senate Finance Committee, Bipartisan Investigative Report on the IRS's Processing of 501(c)(3) and 501(c)(4) Applications for Tax-Exempt Status Submitted by "Political Advocacy" Organizations From 2010-2013 (145 pages):

While much has been reported about the alleged political targeting over the last two years, it is important to stress that this Committee has conducted the only bipartisan investigation into the matter. Consequently, this report will perhaps serve as the definitive account of events transpiring at the IRS and the management failures and other causes that were at the root of the IRS's actions. Hopefully, this report will provide a roadmap for how Congress and the public can act to make sure this type of conduct does not happen again. ...

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August 6, 2015 in Congressional News, IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, July 30, 2015

Senate Holds Hearing Today On The Impact Of The U.S. Tax Code On The Market For Corporate Control And Jobs

Senate LogoThe Senate Permanent Subcommittee on Investigations held a hearing today on Impact of the U.S. Tax Code on the Market for Corporate Control and Jobs:

The hearing explored the impact of the U.S. corporate tax code on foreign acquisitions of U.S. businesses and the ability of U.S. businesses to expand by acquisition.

In connection with the hearing, the majority staff released a 133-page report, which examines the tax motivations behind acquisitions and mergers by Valeant Pharmaceuticals, Burger King, and InBev.

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July 30, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, July 29, 2015

Senate Permanent Subcommittee on Investigations Shifts Focus From Business To Government

Senate LogoBloomberg, Senate Body Shifts Focus After Years Probing Apple, Goldman, UBS, by Jesse Drucker & Richard Rubin:

A U.S. Senate investigative subcommittee, which has used its power for more than a decade to scrutinize corporations and financial institutions for wrongdoing, is shifting its focus to keeping tabs on the government.

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July 29, 2015 in Congressional News, Tax | Permalink | Comments (0)

Thursday, July 23, 2015

Cono Namorato Sails Through Senate Hearing On Nomination To Be Assistant Attorney General, Tax Division

ConoRepublicans and Democrats alike praised  Cono R. Namorato, President Obama's nominee to be Assistant Attorney General for the Tax Division of the Department of Justice, in a Senate Judiciary Committee hearing yesterday. Mr. Namorato's testimony is here.

Cono R. Namorato is currently a Member of the law firm Caplin & Drysdale, a position he has held since 2006 and previously from 1978 to 2004. From 2004 to 2006, Mr. Namorato served as Acting Deputy Commissioner for certain designated matters and as Director of the Office of Professional Responsibility for the Internal Revenue Service (IRS) in the Department of the Treasury. Before beginning his career at Caplin & Drysdale, Mr. Namorato held various positions within the Tax Division of the Department of Justice (DOJ), including Deputy Assistant Attorney General from 1977 to 1978, Assistant Chief and then Chief of the Criminal Section from 1973 to 1977, and Supervisory Trial Attorney and Trial Attorney from 1968 to 1973. Mr. Namorato began his career in 1963 as a Special Agent for the Criminal Investigation Division of the IRS in the Brooklyn District.

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July 23, 2015 in Congressional News, Tax | Permalink | Comments (1)

Wednesday, July 8, 2015

Senate Finance Committee Releases Reports From Bipartisan Tax Working Groups

Senate Logo The Senate Finance Committee today released reports from the committee's five bipartisan tax working groups:

The reports offer policy options and recommendations for ‎the Committee to consider as part of comprehensive tax reform.

Background
On January 15, 2015, to coincide with the kickoff of a series of tax reform hearings, the Finance Committee Chairman and Ranking Member announced the formation of bipartisan tax reform working groups. 

In March, after five tax reform hearings, the Committee announced it would ask stakeholders and the public to submit ideas to the bipartisan working groups. The Committee released those submissions on April 29, 2015.

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July 8, 2015 in Congressional News, Tax | Permalink | Comments (0)

Monday, July 6, 2015

The IRS Scandal, Day 788

TIGTATreasury Inspector General for Tax Administration Report of Investigation, Exempt Organization Data Loss and Potential Obstruction of Justice:

The investigation determined that there were six possible sources to examine in order to potentially recover the missing e-mails. These sources were LERNER's crashed hard drive, the backup or disaster recovery tapes, a decommissioned Microsoft (MS) Exchange 2003 e-mail server, the backup tapes for the decommissioned e-mail server, LERNER's BlackBerry, and loaner laptop computers that may have been assigned to her while her laptop was being repaired. An examination of four of these sources, the backup or disaster recovery tapes, the decommissioned Exchange 2003 e-mail server, LERNER's BlackBerry, and the loaner laptops produced e-mail that the IRS had not previously produced to Congress, DOJ or TIGTA. The investigation also determined that once it was discovered that there was a gap in the IRS' production of LERNER's e-mail, the IRS did not fully identify as a source or perform recovery attempts for e-mail on the following electronic media, all of which the IRS had in their possession: backup or disaster recovery tapes, the decommissioned Exchange 2003 e-mail server, the backup tapes for the decommissioned e-mail server or the loaner laptop computers.  ...

The investigation also revealed that on or about March 4, 2014, one month after the IRS realized it was missing some of LERNER's e-mails, IRS employees in the IRS Enterprise Computing Center in Martinsburg, West Virginia (Martinsburg), magnetically erased 422 backup tapes that are believed to have contained LERNER's e-mails that were responsive to Congressional demands and subpoenas. However, the investigation did not uncover evidence that the IRS and its employees purposely erased the tapes in order to conceal responsive e-mails from the Congress, the DOJ and TIGTA. 

The investigation revealed that the backup tapes were destroyed as a result of IRS management failing to ensure that a May 22, 2013, e-mail directive from the IRS Chief Technology Officer (CTO) concerning the preservation of electronic e-mail media was fully understood and followed by all of the IRS employees responsible for handling and disposing of e-mail bStephen MANNING, former IRS Deputy Chief Information Officer, Strategy and Modernization.ackup media.  ...

When interviewed, [Terence MILHOLLAND, IRS Chief Technology Office] was asked if he knew that e-mail backup tapes from a decommissioned e-mail server had been degaussed in March 2014, MILHOLLAND stated that he was not aware of this, and he advised that he was "blown away" at the revelation. He further stated that IRS IT senior management was ultimately responsible. MILHOLLAND also stated that his May 2013 e-mail directive would have applied to preserving the NCFB backup tapes and that the organization that sent them to be destroyed would also be responsible for their destruction.

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July 6, 2015 in Congressional News, Gov't Reports, IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, June 24, 2015

House Holds Hearing Today On Repatriation of Foreign Earnings

House LogoThe Subcommittee on Select Revenue Measures of the House Ways & Means Committee holds a hearing today on Repatriation of Foreign Earnings as a Source of Funding for the Highway Trust Fund.  In connection with the hearing, the Joint Committee on Taxation has released Present Law And Selected Proposals Related To The Repatriation Of Foreign Earnings (JCX-96-15):

Part I of this document ... provides a description of present law related to the repatriation of foreign earnings as well as the financial accounting treatment of undistributed earnings of foreign subsidiaries under U.S. generally accepted accounting principles (“GAAP”). Part II describes two recent tax reform proposals that have included a deemed repatriation as part of a transition to a new international tax system: former House Ways and Means Committee Chairman Dave Camp’s Tax Reform Act of 2014 and the Administration’s Fiscal Year 2016 Revenue Proposals. Part III provides a discussion of the economic impact and design of a one-time tax on historic foreign earnings. This part of the document highlights some issues concerning whether the one-time tax is mandatory or voluntary, and whether it is enacted as part of broader reform of the international tax system, but for sake of simplicity confines most of the analysis to the hypothetical case of a mandatory one-time tax enacted outside the context of international tax reform.

June 24, 2015 in Congressional News, Tax | Permalink | Comments (0)

Thursday, June 11, 2015

CRS: Reform of U.S. International Taxation

CRS LogoCongressional Research Service:  Reform of U.S. International Taxation: Alternatives, by Jane G. Gravelle:

A striking feature of the modern U.S. economy is its growing openness—its increased integration with the rest of the world. The attention of tax policy makers has recently been focused on the growing participation of U.S. firms in the international economy and the increased pressure that engagement places on the U.S. system for taxing overseas business. Is the current U.S. system for taxing U.S. international business the appropriate one for the modern era of globalized business operations, or should its basic structure be reformed?

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June 11, 2015 in Congressional News, Tax | Permalink | Comments (0)

Thursday, April 23, 2015

House Report: IRS ‘Deliberately’ Cut Customer Service to Make Tax Season Painful for Taxpayers

House LogoHouse Ways & Means Committee Majority Staff Report, Doing Less With Less: IRS’s Spending Decisions Harm Taxpayers (Apr. 22, 2015):

During the 2015 tax-filing season, the IRS provided what its own Commissioner described as “abysmal” customer service, blaming skyrocketing wait times for telephone and in-person assistance on agency budget cuts. The IRS even called budget cuts “a tax cut for tax cheats.” But a close review of the agency’s spending shows the IRS deliberately cut $134 million in funding for customer service to pay for other activities. Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filling season. Other spending choices, including prioritizing employee bonuses and union activity on the taxpayer’s dime, used up resources that otherwise could have been used to assist another 10 million taxpayers.

The IRS’s spending choices and mismanagement of resources raise serious questions about the nature and extent of the agency’s self-described budget crisis and its commitment to serving the taxpayer.

Press and blogosphere coverage:

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April 23, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (9)

Friday, April 17, 2015

House Votes To Repeal Estate Tax, Preserve Step-Up In Basis At Death

Estate Tax LogoFollowing up on Monday's post, the House voted 240-179 yesterday to repeal the estate tax and preserve step-up in basis at death:

April 17, 2015 in Congressional News, Tax | Permalink | Comments (8)

Monday, April 13, 2015

WaPo Fact Checker: Who Wrote the 'IRS Code'?

WaPo Fact CheckerWashington Post Fact Checker, Who Wrote the ‘IRS Code’? Hint: It Wasn’t the Internal Revenue Service:

On tax reform, we, right now, have more words in the IRS code than there are in the Bible — not a one of them as good.
–Sen. Ted Cruz (R-Texas), speech at International Association of Fire Fighters legislative conference, March 10, 2015

The Fact Checker previously wrote that Cruz’s comparison was ultimately meaningless — not worthy of a Geppetto Checkmark nor a Pinocchio — because saying one piece of text has more words than another doesn’t really tell you anything. A lot of readers responded to us via e-mail and social media — some critical, some appreciative and a few amused.

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April 13, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (3)

Saturday, April 11, 2015

Joint Tax Committee: Choice Of Business Entity

The Joint Committee on Taxation yesterday released Choice Of Business Entity: Present Law And Data Relating To C Corporations, Partnerships, And S Corporations (JCX-71-15 ):

This document, prepared by the staff of the Joint Committee on Taxation, provides information about present law and data relating to C corporations, partnerships (including LLCs), and S corporations. Part A of this document provides background information on the choice of business entity in the United States, describes sole proprietorships and their Federal tax treatment, summarizes present law governing the Federal tax treatment of C corporations, partnerships, and S corporations, and presents a table of the principal differences in tax treatment of these three types of business entities. Part B of this document presents data concerning the distribution of business entities by number, size, industry, and net income.

Figure 1

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April 11, 2015 in Congressional News, Tax | Permalink | Comments (1)

Wednesday, April 8, 2015

Brown: The IRS Should Report on Tax Returns Filed by All 535 Members of Congress

535National Journal, Congressional Tax Returns Could Tell Us a Lot:

Dorothy Brown, a professor at Emory University who specializes in tax law, has proposed an idea to finally spur tax reform: examining the tax returns of all 535 members of Congress. I recently spoke with her about the proposal, which she calls "The 535 Report." Our conversation has been edited and condensed. ...

How long have you been talking about the 535 Report?

I spoke about this at a Pepperdine University Law School symposium in January 2013 [Tax Advice for the Second Obama Administration] and wrote a law-review article for the symposium that was published that April. [The 535 Report: A Pathway to Fundamental Tax Reform, 40 Pepp. L. Rev. 1155 (2013)] I study presidential tax returns, which are voluntarily disclosed, and I started thinking: Imagine what I'd find if I had congressional tax returns.

What needs to be done to take this idea further?

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April 8, 2015 in Conferences, Congressional News, Scholarship, Tax | Permalink | Comments (0)

Tuesday, March 31, 2015

The Bipartisan Push For Consumption Taxes As Path For Tax Reform

Wall Street Journal, Tax Proposals Would Move U.S. Closer to Global Norm; Proposals For a Consumption Tax Gain Traction in Both Parties:

U.S. lawmakers on both sides of the aisle increasingly are finding appeal in an ambitious concept for overhauling the nation’s income-tax system: a tax based on consumption, a tool long used around the world.

The tax-writing Senate Finance Committee is giving new consideration to the consumption-tax idea with the hope that its promised boost to economic growth would ease the way to a revamp.

As lawmakers have examined a tax overhaul, “it becomes extremely difficult to see a political path to accomplish it” within the confines of the current income-tax system, said Sen. Ben Cardin (D., Md.), co-chairman of a Finance Committee working group negotiating a possible overhaul of business taxes. As a result, the idea of a consumption tax “is getting a great deal more respect, and it is in the discussions,” he said.

Mr. Cardin introduced legislation last year to create a type of consumption tax known as a value-added tax and at the same time lower business taxes and scrap income taxes completely for lower-income Americans.

Republicans on the working group also are interested in the concept, including a proposal put forward recently by GOP Sens. Marco Rubio of Florida and Mike Lee of Utah. That plan would make several changes to the tax code that would move the nation closer to a consumption-based system. ...

The talks open up a possible new direction in slow-moving discussions about rewriting the U.S. tax system. Enactment of a broad-based federal consumption tax would align the U.S. with a global trend. In the U.S., most of those taxes now are in the form of state and local sales taxes.

WSJ

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March 31, 2015 in Congressional News, Tax | Permalink | Comments (3)

Joint Tax Committee: Overview Of The Federal Tax System

The Joint Committee on Taxation yesterday released Overview Of The Federal Tax System As In Effect For 2015 (JCX-70-15):

The current Federal tax system has four main elements: (1) an income tax on individuals and corporations (which consists of both a “regular” income tax and an alternative minimum tax); (2) payroll taxes on wages (and corresponding taxes on self-employment income) to finance certain social insurance programs; (3) estate, gift, and generation-skipping taxes, and (4) excise taxes on selected goods and services. This document provides a broad overview of each of these elements. 

JCT

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March 31, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, March 25, 2015

House Ways & Means Committee Marks Up Tax Bills Today

Thursday, March 19, 2015

House, Senate GOP Tax Leaders Urge President Obama to Work With Congress on Tax Reform, Rather Than Take Unilateral Executive Action

Congress (2015)Following up on my previous post, President Obama Is 'Very Interested' in Raising Taxes Through 'Executive Action':  House Ways & Means Committee Chair Paul Ryan and Senate Finance Committee Chair Orrin Hatch yesterday sent this joint letter to Treasury Secretary Jack Lew "urging the Administration to tackle unfavorable provisions in the tax code by working with Congress on comprehensive tax reform instead of taking unilateral action":

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March 19, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, March 18, 2015

House Holds Hearing Today on The Burden of the Estate Tax on Family Businesses and Farms

House LogoThe Subcommittee on Select Revenue Measures of the House Ways & Means Committee holds a hearing today on The Burden of the Estate Tax on Family Businesses and Farms (links to statements and testimony below):

In connection with the hearing, the Joint Committee on Taxation has released History, Present Law, And Analysis Of The Federal Wealth Transfer Tax System (JCX-52-15):

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March 18, 2015 in Congressional News, Tax | Permalink | Comments (1)

Tuesday, March 17, 2015

Senate Holds Hearing Today on Building a Competitive U.S. International Tax System

Senate LogoThe Senate Finance Committee holds a hearing today on Building a Competitive U.S. International Tax System (links to statements and testimony below):

  • Orrin Hatch (R-UT), Statement
  • Ron Wyden (D-OR), Statement
  • Rosanne Altshuler (Professor of Economics and Dean of Social and Behavioral Sciences, Rutgers University), Testimony
  • Pamela F. Olson (U.S. Deputy Tax Leader & Washington National Tax Services Leader, PricewaterhouseCoopers), Testimony
  • Stephen E. Shay (Professor of Practice, Harvard Law School), Testimony
  • Anthony H. Smith (Vice President of Tax & Treasurer, Thermo Fisher Scientific), Testimony

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Selected Policy Issues In The U.S. Taxation Of Cross-Border Income (JCX-51-15):

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March 17, 2015 in Congressional News, Tax | Permalink | Comments (0)

Monday, March 16, 2015

Joint Tax Committee: General Explanation of Tax Legislation Enacted in the 113th Congress

Joint Tax CommitteeThe Joint Committee on Taxation has released General Explanation of Tax Legislation Enacted in the 113th Congress (JCS-1-15) (287 pages):

This document, prepared by the staff of the Joint Committee on Taxation in consultation with the staffs of the House Committee on Ways and Means and the Senate Committee on Finance, provides an explanation of tax legislation enacted in the 113th Congress. The explanation follows the chronological order of the tax legislation as signed into law. 

For each provision, the document includes a description of present law, explanation of the provision, and effective date. Present law describes the law in effect immediately prior to enactment and does not reflect changes to the law made by the provision or by subsequent legislation. Reasons for change are included based on Committee report language for provisions reported by a Committee. For provisions enacted in bills that went directly to the House and Senate floors without a Committee report, no reasons for change are included in this document. 

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March 16, 2015 in Congressional News, Tax | Permalink | Comments (0)

Thursday, March 12, 2015

Senate Holds Hearing Today on Protecting Taxpayers from Schemes and Scams During the 2015 Tax Filing Season

Senate LogoThe Senate Finance Committee holds a hearing today on Protecting Taxpayers from Schemes and Scams During the 2015 Tax Filing Season (links to statements and testimony below):

  • Orrin Hatch (R-UT), Statement
  • Ron Wyden (D-OR), Statement
  • Caroline Ciraolo (Acting Assistant Attorney General, Tax Division, U.S. Department of Justice), Testimony
  • Timothy Camus (Deputy Inspector General for Investigations, Treasury Inspector General for Tax Administration, U.S. Treasury Department), Testimony
  • Mike Alley (Commissioner, Indiana Department of Revenue), Testimony
  • John Valentine (Commission Chair, Utah State Tax Commission), Testimony
  • Ellen Klem (Director of Consumer Outreach & Education, Office of the Attorney General, Oregon Department of Justice), Testimony

March 12, 2015 in Congressional News, Tax | Permalink | Comments (0)

Senate Seeks Input on Bipartisan Tax Reform

Senate LogoSenate Finance Committee Press Release, Hatch, Wyden Launch New Effort to Seek Input on Bipartisan Tax Reform:

Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) today announced a bipartisan effort to begin soliciting ideas from interested members of the public and stakeholders on how best to overhaul the nation’s broken tax code to make it simpler, fairer, and more efficient. The goal of this effort is to provide additional input, data, and information to the Committee’s bipartisan tax working groups, which are currently analyzing existing tax law and examining policy trade-offs and available reform options within each group’s designated area.

“By opening up our bipartisan working groups to public input, we hope to gain a greater understanding of how tax policy affects individuals, businesses, and civic groups across our nation,” Hatch and Wyden said. “In doing so, we will also equip our working groups with valuable input, and we hope these suggestions will help guide the groups through the arduous task of putting forth substantive ideas to reform the tax code in each of their areas.”

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March 12, 2015 in Congressional News, Tax | Permalink | Comments (1)

Tuesday, March 10, 2015

Senate Holds Hearing Today on Tax Complexity, Compliance, and Administration: The Merits of Simplification in Tax Reform

Senate LogoThe Senate Finance Committee holds a hearing today on Tax Complexity, Compliance, and Administration: The Merits of Simplification in Tax Reform (links to statements and testimony below):

  • Orrin Hatch (R-UT), Statement
  • Ron Wyden (D-OR), Statement
  • Carol Markman (CPA & Tax Director, EP Caine & Associates), Testimony
  • Mihir Desai (Professor, Harvard Law School), Testimony
  • Bruce Bartlett (Former Deputy Assistant Secretary, U.S. Treasury Department), Testimony
  • Keith Fogg (Professor and Tax Clinic Director, Villanova Law School), Testimony

In connection with the hearing, the Joint Committee on Taxation has released Complexity In The Federal Tax System (JCX-49-15):

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March 10, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, March 4, 2015

Senate Report Blames Tax Pros for Unfair Tax Code

Senate LogoFollowing up on yesterday's post, Senate Holds Hearing Today on Fairness in Taxation:  Democratic Staff, Senate Finance Committee, How Tax Pros Make the Code Less Fair and Efficient: Several New Strategies and Solutions:

Have you ever heard of a collar? Or a basket option? Or a wash sale? Most people haven’t. But many taxpayers use these sophisticated transactions to cut the taxes they could owe in half, often paying effective rates far lower than people who earn a regular paycheck.

This report describes each of these little known tax avoidance strategies identified for Senator Wyden by the nonpartisan staff of the Joint Committee on Taxation (JCT) and outside independent experts, relying on memoranda, examples, and descriptions. A preliminary analysis indicates that reforms to rein in some of these strategies could reduce the amount of taxes avoided by tens of billions of dollars over the next decade while making the tax code fairer and simpler overall.

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March 4, 2015 in Congressional News, Tax | Permalink | Comments (2)

Tuesday, March 3, 2015

Senate Holds Hearing Today on Fairness in Taxation

Senate LogoThe Senate Finance Committee holds a hearing today on Fairness in Taxation (links to statements and testimony below):

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March 3, 2015 in Congressional News, Tax | Permalink | Comments (0)

Monday, March 2, 2015

Joint Tax Committee: The Top 1% Receives 19% Of All Income, Pays 49% Of All Income Taxes

Joint Tax CommitteeThe Joint Committee on Taxation has released Fairness and Tax Policy (JCX-48-15):

The Senate Committee on Finance has scheduled a public hearing on March 3, 2015, titled “Fairness in Taxation.” This document ... describes concepts of tax equity and provides data related to the current and historical distribution of income and taxes. ...

For 2015, the top 10 percent (in terms of income) of all tax returns receive 45 percent of all income and pay 82 percent of all income taxes. The top five percent of all tax returns receive 34 percent of all income and pay 71 percent of all income taxes. The top one percent of all tax returns receives 19 percent of all income and pay 49 percent of all income taxes. 

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March 2, 2015 in Congressional News, Gov't Reports, Tax | Permalink | Comments (14)

Friday, February 27, 2015

Republicans Name Keith Hall CBO Director, Replacing Doug Elmendorf

Hall 2Wall Street Journal, GOP Leaders Name Keith Hall as CBO Director:

Congressional Republican leaders named Keith Hall to a four-year term as the next director of the Congressional Budget Office, the influential nonpartisan budget scorekeeper for Congress.

Mr. Hall, a former White House economist who served as commissioner of the Bureau of Labor Statistics, will replace Doug Elmendorf starting April 1, GOP leaders said Friday.

Mr. Hall, who has served as chief economist of the International Trade Commission since September, headed the BLS, one of the government’s main economic-data-gathering agencies, from 2008 to 2012. He served as the chief economist for the White House Council of Economic Advisers from 2005 to 2008.

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February 27, 2015 in Congressional News, Tax | Permalink | Comments (0)

Thursday, February 26, 2015

Senate Holds Hearing on The Coming Debt Crisis

Senate LogoThe Senate Budget Committee held a hearing yesterday on The Coming Crisis: America’s Dangerous Debt (with links to testimony):

February 26, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, February 25, 2015

Senate Holds Hearing on Tax Reform, Growth and Efficiency

Senate LogoThe Senate Finance Committee held a hearing yesterday on Tax Reform, Growth and Efficiency:

In connection with the hearing, the Joint Committee on Taxation released Economic Growth And Tax Policy (JCX-47-15):

This document ... includes an overview of economic growth and the impact that taxes may have on economic growth.

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February 25, 2015 in Congressional News, Tax | Permalink | Comments (0)

Tuesday, February 10, 2015

Senate Holds Hearing Today On Lessons From The 1986 Tax Reform

Senate LogoThe Senate Finance Committee holds a hearing today on Getting to Yes on Tax Reform: What Lessons Can Congress Learn from the Tax Reform Act of 1986?:

Press and blogosphere coverage:

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February 10, 2015 in Congressional News, Tax | Permalink | Comments (1)

Tuesday, January 27, 2015

TPC Program on Dynamic Scoring: Now What?

The Tax Policy Center hosted a program yesterday on Dynamic Scoring: Now What? (video here):

On January 26, the Urban-Brookings Tax Policy Center and the Hutchins Center on Fiscal and Monetary Policy at Brookings took a close look at how dynamic scoring is done, the models that JCT and CBO use for macroeconomic analysis of tax bills and other major legislation (immigration, Affordable Care Act, infrastructure), and how to communicate this analysis accurately.

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January 27, 2015 in Conferences, Congressional News, Tax | Permalink | Comments (0)

CBO Projects Tepid Economic Growth, Rising Deficits Despite Rising Revenues

Thursday, January 15, 2015

Testimony at House Hearing on Policies to Promote Job Creation and Economic Growth

House LogoTestimony at Tuesday's House Ways & Means Committee hearing on Moving America Forward: With a Focus on Economic Growth:

The first hearing of the 114th Congress focused on the state of the U.S. economy and policies that can promote job creation and economic growth.

January 15, 2015 in Congressional News, Tax | Permalink | Comments (0)