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>> Consider This: Mistakes Were Made
>> Top Reads: Foundations Fan Out on Capitol Hill to Press Their Case on Taxes and Other Worries
Last month, lawmakers passed a short-term funding package in their two-year budget deal that would keep the government open through March 23. With that deadline fast approaching, it appears lawmakers are close to an agreement on a long-term spending package, which was expected to be voted on in the House this week. However, it appears that House vote will bump up closer to the deadline next week.
The bill is expected to include at least one tax provision that would fix a “glitch” in the new tax law involving an outsized tax cut for farmers. Other errors have been identified, but it’s unclear whether other tax items will be included in any final agreement.
Should lawmakers be unable to come to an agreement on a government spending deal, they’re expected to pass another short-term extension to allow more time for negotiations.
Following the enactment of the new tax code, a number of glitches have been identified that will likely need to be addressed by Congress this year or early next year. The typical vehicle for fixes to these glitches is known as a “technical corrections” bill, in which lawmakers can bring the law in line with what they intended. However, any technical corrections bill will require Democratic buy-in in the Senate, and there’s been no indication that Democrats would be willing to help their colleagues make a Republican-only passed bill better.
According to recent reports, advancing a technical corrections bill isn’t on House Speaker Paul Ryan’s (R-WI) immediate agenda. Just last week, Speaker Ryan said Republicans will wait until later this year to address any fixes.
But there’s another bucket of tax items that could get some action. This week, House Ways and Means Chairman Kevin Brady (R-TX) said Republicans are working on a second round of tax cuts that would be unveiled sometime this year. As you may recall, several of the individual provisions in the 2017 tax reform bill were only temporary, and Chairman Brady said those are the types of issues they’ll plan to address. It’s important to note that this kind of effort faces a lot of headwind, including cost and bipartisanship. However, the political benefits of such a proposal heading into the 2018 elections are potentially sizeable. Stay tuned.
On Tuesday, March 13, the Alliance for Charitable Reform held its annual Summit for Leaders as part of Foundations on the Hill. The programming included three panels: the Congressional staff panel, a Johnson Amendment panel, and a practitioners panel.
You can read a full recap of the event here.
“Mistakes were made.” Three words that generally come as unwelcome news.
There is much unhappiness in Washington and beyond over mistakes that have turned up – and continue to turn up – in the tax bill that passed late last year.
It should come as no surprise that errors are surfacing in the tax bill that was signed into law on December 22, 2017. By congressional standards, the drafting of the bill was notably quick. That, plus the fact that the bill and the explanation of that bill ran over 1,900 pages means that no one should be surprised that mistakes were made. The question is what will Congress do about them?
At this point, we are treading water on fixing mistakes. Democrats are still smarting from a tax-writing process that, in their view, shut them out; coupled with the fact that Republicans allowed them just one or two Obamacare fixes after it passed. So they are in no mood to make what they view as a very bad tax bill any better.
At some point over the next eight months, however, Democrats may decide to play ball and engage in fixing more than one or two errors that have been unearthed in the tax bill. Or they may sit tight until after the election in the hopes that they flip either the House and/or Senate and use their increased leverage to get some of their priorities in the tax bill taken care of in exchange for their cooperation on making the tax bill work better. In all of this, we are of course on the lookout for opportunities to enhance the value of the charitable deduction as the process moves forward.
Or, as some have wondered, might they consider a mistake exchange? That is, agree to fix some Obamacare issues in exchange for some tax bill issues? That is not outside the realm of possibility.
For the time being, all we know is that mistakes were made and it is unclear how they get fixed going forward.
- National: Foundations Fan Out on Capitol Hill to Press Their Case on Taxes and Other Worries
- National: Roundtable Submits Comments to Treasury on Foundation Use Of Donor-Advised Funds
- National: What The New Tax Law Means For Your Charitable Giving
- National: Virtual Currency and Charitable Donations
- National: Tax Law May Hit Human Services Especially Hard, Research Suggests
- National: Education, Religion Get Largest Share of Donor-Advised Fund Dollars
- Local: New Jersey lawmakers approve plan to write off property taxes as charitable donations
- Local: Tax law changes expected to reduce charitable giving
- Local: Minnesota nonprofits want lawmakers to encourage more giving
- Opinion: GOP’s new tax law encourages campaign donor secrecy
- Opinion: The New Tax Rules: How To Circumvent The Adverse Impact On Charitable Giving
- Opinion: Key Questions About Donor-Advised Funds Ignored in New Study
- Blog: 2018 ACR Summit for Leaders Wrap-Up
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