Apr 5, 2017
Tax Policy Update
QUOTE OF THE WEEK
“I would assume that hopefully we’d come up with a plan
that we all agree on. The president will put out
principles […] in terms of what his goals are and how
he wants to drive this as the process moves forward.
[W]e’re going to have a robust debate about aspects of
the plan, certain provisions, and certain other taxes
pieces. But we’re going to work with the House and
Senate on it.”
- White House Press Secretary Sean Spicer on tax reform
March 27, 2017
Ridin’ on a Tax Train.
The White House is driving the train on tax reform, but there is a bit of
confusion as to where the administration is exactly in the process. Trump
convened a meeting with his top economic advisers last week to review the
policy options and process for reform. In the room were Treasury Secretary
Steven Mnuchin, chief strategist Steve Bannon, Jared Kushner, National
Economic Council Director Gary Cohn, Special Assistant Shahira Knight, as
well as Craig Phillips and Justin Muzinich, both counselors at Treasury.
The president was briefed on both the House GOP tax reform blueprint and
the Camp Draft.
The White House remains mum on the timing and content of the president’s
tax plan. Back in February, the president said that his administration was
“going to be announcing something […] over the two or three weeks that will
be phenomenal in terms of tax.” It’s April, and tax policy wonks have yet
to lay eyes on the White House proposal. This is perhaps a sign that the
administration is taking a more deliberative approach after the healthcare
Some Republican lawmakers aren’t completely thrilled with the idea of the
administration offering a competing tax proposal. Although House Ways and
Means Chairman Kevin Brady welcomes the president’s leadership on tax
reform, he would rather …
Sooo Over It.
Like any jilted ex, the Trump Administration and congressional Republicans
keep insisting that they are over health care reform, littering their news
feeds with mentions of their new interest: tax reform. However, rumors keep
surfacing that the White House has not moved on from the healthcare fight.
For the past week, the administration and members of the House Freedom
Caucus have been trying to work out a deal to revise and revive the American Health Care Act (AHCA) On the chopping block are
protections allowing adult-children under age 26 to maintain coverage under
their parents’ insurance plan and essential health benefits (EHBs). EHBs
include 10 services on plans: (1) ambulatory patient services; (2)
emergency services; (3) hospitalization; (4) maternity and newborn care;
(5) mental health and substance use disorder services including behavioral
health treatment; (6) prescription drugs; (7) rehabilitative and
habilitative services and devices; (8) laboratory services; (9) preventive
and wellness services and chronic disease management; and (10) pediatric
services, including oral and vision care. The revised bill would also allow
Do the Roc-Away, Now Roll Back.
On March 30, the Senate voted 50-49 to approve H.J. Res. 67 repealing the
Municipal Auto-IRA Rule finalized under the Obama Administration. Published
on Dec. 20, 2016, the rule allows large cities and counties to set up
auto-enrollment retirement savings programs. Specifically, the rule
establishes programs that require employers to automatically enroll their
employees into IRAs managed by a city or county. It does so by providing a
safe harbor from the requirements of ERISA for IRAs managed by certain
Even though Trump promised on the campaign trail to allow municipalities
and states to continue offering retirement plan, he is expected to sign the
resolution. Trump advisor Diana Furchtgott-Roth said, “Trump believes any
states who want to set up their own auto-IRAs have every right to do so and
he doesn't want to interfere with their initiatives.” Republicans justified
their vote in favor of H.J. Res. 67 on the grounds that …
Tax Professionals Weigh in on IRS Agenda.
On April 3, tax practitioners and accountants wrote a letter to Congress in
support of its efforts to ensure a service-oriented, modernized tax
administration system. The tax practitioners explained their role as
advisers to millions of taxpayers gives them significant insight into the
Internal Revenue Service (IRS), making them uniquely qualified to offer
recommendations to improve the agency. The letter sets forth the “Ensuring
a Modern-Functioning IRS for the 21st Century” framework, offering the
- Any effort to modernize the business practices and technology of the IRS
should build on the foundation established by the June 25, 1995 report of
the National Commission on Restructuring the IRS.
- As part of congressional oversight, the annual joint hearing review
should be reestablished.
- The Joint Committee on Taxation should provide a bi-annual report on the
overall state of the federal tax system.
- The GAO should review the IRS Oversight Board and determine if it is an
essential component to allow the IRS to become a respected,
- The IRS should utilize the full range of available authorities to hire
and compensate qualified and experienced professionals from the private
sector, as needed, to improve the agency’s ability to meet its mission.
- The legislative and executive branches should determine the appropriate
level of service and compliance they want the IRS accountable to provide
and then dedicate appropriate resources for the agency to meet those goals.
- Customer satisfaction surveys should continue as a measure of success for
- The IRS should provide the needed face-to-face interaction to accommodate
those taxpayers who cannot afford or choose not to use the online account
- The IRS must designate a new dedicated “executive-level” practitioner
services unit. Under this service unit, the IRS should provide tax
practitioners with a tax professional account with immediate account access
to all of their clients’ information. The secure account must also include
single sign-on authentication.
- The IRS should offer robust practitioner priority hotlines with
higher-skilled employees capable of addressing complex technical and
- Finally, the IRS should assign customer service representatives to
address complex issues that practitioners are unable to resolve through the
Tax practitioners hope that these recommendations will help the IRS
improve, noting that the “current degradation of the IRS’ services is
The letter comes as Congress once again contemplates slashing the agency’s
funding, which has been drastically reduced for years by Republicans. The
letter stopped short of recommending increased funding for the IRS.
Battle over CFPB’s Constitutionality Continues.
In a legal brief filed on March 31, the Consumer Financial Protection
Bureau (CFPB) urged the U.S. Court of Appeals in Washington D.C to uphold
the agency's constitutionality, noting that "[t]he president has no less
control over a single-director agency than he does over a multi-member
commission.” The CFPB’s breach cited various precedent, including the fact
that the U.S. Supreme Court has allowed independent agencies run by
officers that a president does not have the power to remove without cause.
The Justice Department filed its brief on March 17, arguing that the
president should be allowed to fire the CFPB’s independent director at
will. The Justice Department wrote …
President Trump is gunning for the House Freedom Caucus after the GOP’s
failed attempt to repeal Obamacare:
- A group of House Democrats led by Rep. Keith Ellison (D-MN) is calling
on the House Appropriations Subcommittee on Financial Services to increase
funding for the Internal Revenue Service for fiscal year 2018. Democrats
are asking for $12.9 billion for the IRS, arguing that an increase would
help the tax-collection agency to better address cybersecurity threats and
provide timely service to taxpayers. The agency’s current budget is about
$11.2 billion. President Trump has proposed to cut the IRS budget by $239
- President Trump is expected to nominate David Kautter to the post of
assistant secretary for tax policy at the Treasury Department. Kautter is
currently the managing director of the Kogod Tax Center at American
University. Prior to joining the university, Kautter was a partner at Ernst
Joint Economic Committee
Full committee hearing on "The Decline of Economic Opportunity in the
United States: Causes and Consequences."
Senate Banking Committee
Economic Policy Subcommittee hearing on "The Current State of Retirement
Security in the United States."
House Financial Services Committee
Full committee hearing on "The 2016 Semi-Annual Reports of the Bureau of
Consumer Financial Protection."
House Agriculture Committee
Full committee hearing on "Agriculture and Tax Reform: Opportunities for
Senate Finance Committee
Full committee hearing on the 2017 filing season and IRS operations. IRS
Commissioner John Koskinen will testify.
House Financial Services Committee
Financial Institutions Subcommittee hearing to examine the federal
financial regulatory system and opportunities for reform.
House Small Business Committee
Full committee hearing on "Scam Spotting: Can the IRS Effectively Protect
Small Business Information."
Alliance for Health Reform
Webinar on “What’s Next for Health Policy.”
Insured Retirement Institute
Discussion on the challenges that women face when planning retirement.
The Brookings Institution holds a report launch discussion on "Read My
Lips: Why Americans are Proud to Pay Taxes."
National Press Club
Newsmaker Luncheon address with IRS Commissioner John Koskinen.
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Tax Policy Update
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