The “Cromnibus” train-wreck spending bill process seems to be holding up everything else, including the extender vote. The 55 Lazarus provisions awaiting revival are on hold while Congress struggles to avert a government “shutdown” at midnight tonight.
Outgoing Senate Majority Leader Reid has said that the Senate will finish the Cromnibus before voting on the extender bill, HR 5771. The house-passed bill would extend dozens of tax breaks that expired at the end of 2013 retroactively through the end of this month. Business provisions in the bill include the $500,000 Section 179 deduction, 50% bonus depreciation, the R&D credit, and the 5-year built-in gain period for S corporations. The provision allowing IRA charitable donations is among the individual breaks at stake.
There is no indication that the Senate will fail to eventually pass HR 5771, or that the President will veto it, but politics are uncertain, and I’ll feel better about things when they do pass it. It appears the hope they would finish up today is wishful thinking, though; this Wall Street Journal story says the House is expected to pass a two-day funding bill today to give the Senate extra time to approve the spending bill.
The IRS faces a 3.1% funding cut in the bill. That’s a tribute to the tone-deaf and confrontational attitude of IRS Commissioner Koskinen, who has responded to the Tea Party scandals pretty much by saying “give us more money!” Given the increased responsibilities given the IRS by Congress, cutting their budget seems strange. Yet as long as the Commissioner keeps antagonizing his funders, and keeps finding money to fund his “voluntary” preparer regulation program to get around the Loving decision, he can expect similar appropriation success.
Related: Paul Neiffer, Tax Extender Bill May Be Punted to Weekend
– 57.5 cents per mile for business miles. This is 56 cents for 2014.
– 14 cents per mile for charity miles, same as in 2014.
– 23 cents per mile for medical and moving miles. This rate is 23.5 cents for 2014.
Related: William Perez, How to Deduct Car and Truck Expenses on Your Taxes
Peter Reilly, Iowa Corporation Not Liable For California Corporate Tax From Ownership Of LLC Interest. It discusses a California court ruling that mere ownership of a California LLC interest isn’t enough to make the corporate owner subject to California’s $800 minimum franchise tax. If it holds up, it will be good news for many taxpayers dinged by this stupid fee.
Jim Maule, Do-It-Yourself Tax Preparation? Better? Paid preparers didn’t do an impressive job handling the GAO’s secret shoppers.
The new Cavalcade of Risk is up! at WorkersCompensation.com. Always good stuff in the venerable roundup of insurance and risk-management blog posts; this edition features Hank Stern’s take on the “creepy” ACA 404Care.gov site.
Bryan Caplan, The Inanity of the Welfare State:
While taxes are highly progressive, transfers have an upside-down U-shape. Households in the middle quintile get the most money. The richest households actually get more money than the poorest. Think about how many times you’ve heard about government’s great mission to “help the poor.” Could there be any clearer evidence that such claims are mythology?
Eye-opening. Read the whole thing.
TaxProf, The IRS Scandal, Day 581
Alan Cole, Treasury Report: Improper Payments Remain a Problem in EITC, Child Credit (Tax Policy Blog)
David Brunori, Mississippi’s Very Good Idea to Help its Poor (Tax Analysts Blog). It’s an earned income tax credit. Given the massive EITC fraud and error rate, I’m not convinced.
Joseph Thorndike, Wall Street Journal Prefers Ignorance to Expertise (Tax Analysts Blog). It’s about the CBO.
Robert Goulder, Taxing Diverted Profits: The Empire Strikes Back (Tax Analysts Blog). “The message is this: Once people realize what a functional territorial regime looks like, they suddenly become less enamored with the concept. One of several reasons why U.S. tax reform won’t be easy.”
Chris Sanchirico, A Repatriation Tax Holiday for US Multinationals? Four Contagious Illusions (TaxVox)
News from the Profession. The AICPA Can’t Figure Out Why Record Numbers of Accounting Grads Aren’t Taking the CPA Exam (Adrienne Gonzalez, Going Concern).