After a busy March with regard to federal income tax proposals, Congress's interest in this issue has waned somewhat. There are, however, still some recent developments from Washington regarding tax matters, as discussed below:
1. Representative Ryan Introduces His Own Fiscal 2015 Budget Plan - House Budget Committee Chairman Paul Ryan (R-Wisc.) unveiled on April 1 his 2015 Fiscal Year Budget Proposal. The federal tax provisions in his Proposal largely follow his 2014 Fiscal Year tax proposals, calling for two individual tax brackets of 10% and 25%. The Proposal also calls for a cut in the tax rates of corporations, and elimination of the Alternative Minimum Tax.
Interestingly, Rep. Ryan's tax proposal did not endorse the tax reform proposal put forward in February by the Chairman of the House Ways and Means Committee, Rep. Dave Camp (R- Mich.). According to the summary of his plan, Rep. Ryan calls for comprehensive tax reform and lays out some of the principles that should be followed to accomplish this, but it does not embrace any particular tax reform plan.
As in his 2014 Fiscal Year Budget Proposal, Rep. Ryan's latest proposal projects savings from lower projected federal health care spending, and lower projected interest cost on government debt.
2. House Republicans Urge Congress To Prevent the Payment of Bonuses To IRS Workers In Its Tax Exempt Branch - A group of House Republicans have urged that the House Appropriations Committee include special language in the 2015 Fiscal Year financial services and general government appropriations measure now before the Committee. The special language would prohibit the IRS from paying bonuses to employees in its Tax Exempt and Government Entities Division. In a letter to the Committee Chairman, the lawmakers noted that "s you are aware, this is the division within the IRS that was responsible for the targeting of certain ideological groups applying for tax-exempt organization status during the 2012 election cycle." The letter was in response to a statement by IRS Commissioner Koskinen in February that he was issuing 2013 Fiscal Year bonuses to IRS employees in this Division in an effort to improve employee morale.
3. Tea Party Group Asks a U.S. District Court To Order the Release of IRC Section 501 (c)(4) Documents - A conservative organization, Tea Party Patriots, is attempting to force the IRS into releasing documents related to its proposed rules on political activity for IRC Section 501(c)(4) organizations (I.e., social welfare organizations). A lawsuit, recently filed in the U.S. District Court for the District of Columbia, is asking the Court to order the IRS to release documents related to the proposed rulemaking.
4. IRS Documents Show Lois Lerner Was Investigating Possible Criminal Action Against Certain Tea Party Groups - A conservative education foundation, Judicial Watch, has recently released copies of IRS e-mails between former IRS Director of Exempt Organizations, Lois Lerner, and Nikole C. Flax, former chief of staff to then Acting IRS Commissioner, Steven Miller. The emails reveal that Ms. Lerner discussed with Ms. Flax their possibly working with the Department of Justice to investigate possible criminal prosecution of certain Tea Party groups which had requested tax exempt status under IRC Section 501(c)(4). The possible criminal action was tied to the question of whether such groups had lied in their applications as to the scope and nature of their political activities. The documents were obtained by Judicial Watch as a result of its October 2013 Freedom of Information lawsuit against the IRS, after the IRS refused to respond to four FOIA requests dating back to May 2013.
5. Is the Affordable Care Act Confusing? - If you are not sure how the Affordable Care Act applies to you, you are not alone. According to poll results just released by the Kaiser Family Foundation, about a third of the respondents had tried to find out more information about the Act, and about half of the respondents said that they remain confused about the law and its provisions.
For additional information regarding these topics, please contact your local UHY LLP professional.
Wednesday, April 24, 2019 | 7:30 AM – 9:30 AM EDT | The Hartford Club