Senate Finance Committee Outlines Path Forward on Tax Reform
On June 5, Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) announced the Committee’s next steps with regard to comprehensive tax reform. As part of its efforts, the Committee will hold three hearings during June and July focused on: (1) education tax incentives; (2) identity theft and taxpayer privacy protection; and (3) modernizing corporate taxation. According to Chairman Wyden and Ranking Member Hatch, “[w]hen it comes to tax policy, comprehensive tax reform is our ultimate objective.” In addition to these three hearings, the Committee will continue to explore how to address the depleted Highway Trust Fund “without diverting revenues from repatriation needed for tax reform.”
House to Take Up Three Tax Extender Bills
On June 6, House Majority Leader Eric Cantor (R-VA) announced that the House will consider three tax extender bills this week: (1) H.R 4457, which would make permanent the rule regarding business equipment depreciation under Section 179 of the Internal Revenue Code; (2) H.R. 4453, which would make permanent the reduced recognition period for built-in gains of S corporations; and (3) H.R. 4454, which would make permanent the rule regarding the basis adjustment to stock of S corporations making charitable contributions of property. Additionally, Leader Cantor announced that the House will consider a temporary fix to the depleted Highway Trust Fund, suggesting a reduction in the number of postal delivery days as an offset.
IRS and Treasury to Release Additional Guidance Before FATCA Effective Date
On June 3, Quyen Huynh, Associate International Counsel, U.S. Department of the Treasury (Treasury) announced that the Internal Revenue Service (IRS) and Treasury will be releasing additional guidance before the Foreign Account Tax Compliance Act’s (FATCA) July 1 effective date. First, the government will release instructions for various forms. The government will also release an updated foreign financial institutional (FFI) agreement to be consistent with a package of temporary regulations (T.D. 9657 and T.D. 9658) released in February. Additionally, modifications will be made to the qualified intermediary agreement, foreign withholding partnership agreement, and foreign withholding trust agreement to incorporate requirements under FATCA.