2015 Tax Legislation Update

Congress returned to work in April after a two week recess and the House immediately passed a slew of tax-related bills. In rapid succession, House lawmakers voted to repeal the federal estate tax, make permanent the state and local sales tax deduction, and make reforms to the IRS.

Tax Bills

While tax reform discussions continue between the White House and GOP leaders in Congress, the House moved forward with votes on a number of stand-alone tax bills. In April, the House approved:

  • HR 622, the State and Local Sales Tax Deduction Fairness Bill, which extends permanently the deduction for state and local sales taxes in lieu of state and local income taxes.
  • HR 1058, the Taxpayer Bill of Rights Bill of 2015, which codifies taxpayer rights before the IRS;
  • HR 1152, which prohibits IRS employees from using personal email accounts to conduct official business;
  • HR 1295 and HR 1314, which make reforms to the process for requesting tax-exempt status;
  • HR 709, the Prevent Targeting at the IRS Bill, which makes political targeting a terminating offense at the IRS; and
  • HR 1104, the Fair Treatment for All Gifts Bill, intended to ensure fair and equal gift tax audit treatment for taxpayers who donate to tax-exempt organizations.

Estate Tax Repeal

The Death Tax Repeal Bill (HR 1105) was approved by the House, 240-to-179, mainly along party lines. In addition to repealing the federal estate tax, the bill repeals generation-skipping transfer (GST) tax for all future transfers. GOP leaders in the Senate have indicated their support for the bill but have not yet scheduled a vote. Because of Senate rules, tax votes generally require a super majority of 60 votes and it is unclear if estate tax repeal has the requisite support. President Obama has said he would veto any legislation to repeal the federal estate tax.

IRS Levy

On April 16, President Obama signed the Medicare Access and CHIP Reauthorization Act of 2015 (HR 2), also known as the “doc fix” bill. While the new law largely enacts reforms to Medicare, one provision impacts the IRS. The law authorizes the IRS to levy up to 100 percent of a qualified payment owed to a Medicare provider with unpaid tax liabilities. Previously, the IRS could levy up to 30 percent.

If you have any questions about pending tax legislation or tax reform, as always, please contact your Warady & Davis LLP advisor at (847) 267-9600.

 

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