Tax legislation update
Almost exactly a year ago, Congress passed the Tax Cuts and Jobs Act, which made dramatic changes to federal tax laws – most of them retroactive to the beginning of a year nearly ended. This year, it appears we are in for no such shenanigans. There has been plenty of discussion off and on about additional tax legislation (“Tax Reform 2.0”), but it appears to have fizzled out. A bill introduced in the House last month contained a number of provisions that were not well-received by many Democrats or Republicans, so it fell to the cutting room floor in favor of a new proposal that has significantly less reach. The new version drops many so-called “extenders” (proposals that would extend soon-to-be expired provisions). These routine extenders instead may be introduced as part of an ongoing funding effort. In short, we expect no bombshells on the tax law change front in the near future.
While practitioners and taxpayers should be grateful for a relatively stable tax landscape as we close out the year, we are, however, awaiting a number of Treasury Regulations that will clarify numerous questions that remain regarding how to implement last year’s legislation.