With Congress Now Back What Will it Mean for Taxes

With Congress Now Back What Will it Mean for Taxes

Fall is here and that means the rain and wind are on their way back. Congress is back as well and they have a lot to talk about. It’s not exactly clear how much they will get done in the next three months, but they do have several important pending issues that need to be resolved, including several items that will directly affect the upcoming tax season. Let’s take a look at some of the most important tax-related issues that Congress could be considering in the coming months as 2015 winds down.

Internal Tax Reform for Multinational Corporations

One of the largest tax issues that need attention is international tax reform. Republicans have made international tax reform a high priority but as often the case in Washington, both sides don’t always see eye-to-eye. While the White House has maintained that it would be open to the idea of international tax reform, there are several hurdles to overcome. Republicans want to change the tax code for large U.S. multinational companies with something called “innovation boxes,” which offer low tax rates on intellectual property. However, so far, the Senate does not seem too excited about the idea. Several issues would need to be hashed out, but the real issue might be that there simply isn’t enough time to get an agreement before the year ends.

Extend the Tax Credits

As it is almost every other year, whether or not to extend several tax breaks and credits is a big issue that needs to be resolved. Last year many of these break were extended for 2014, but not until the year was almost over. That left a lot of taxpayers in limbo, especially businesses and corporations. It is very likely that these credits will end up being extended yet again, but this time many of them might get a two-year extension. Likewise, they might just get them done a little sooner this time around.

IRS Getting Cut Again

Despite several issues caused by a lack of staff and resources earlier this year during tax season, it is likely that the IRS will again have its budget cut in 2015. That’s because Congress is expected to make more cuts this year and it’s unlikely that the white house or house democrats will try to stop that from happening. The highway trust fund is also expected to eventually pass which will include a multi-year transit and road package.

Latest Tax Plans From Presidential Candidates

Finally, expect a lot of action from both republican and democratic presidential candidates over the coming months in regards to their tax reform plans. From Donald trump to Jeb Bush and from Hilary Clinton to Bernie Sanders, there will be no shortage of rhetoric from the would-be presidential candidates throughout the next few months, and right on into next year. The presidential tax plans, along with all of these other important tax issues, will be taking place in what is likely to be a very hostile fiscal environment. No doubt it will be an eventful fall in Washington. Stay tuned.

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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

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