United States: Tax Policy Update - February 17, 2015

NUMBER OF THE WEEK: 3,415. The number of people who renounced their citizenship in 2014 according to IRS data. This is one of the five highest totals on record since the U.S. Congress passed the Foreign Account Tax Compliance Act in 2010. In the past five years, more than 10,000 Americans living abroad have given up their citizenship. Click here to read the most recent data publication from the IRS.


House Passes Permanent Extenders for Charitable Donations and Small Businesses. The House passed two bills last week that would permanently extend currently expired tax breaks related to charitable contributions and small businesses. The "America Gives More Act of 2015" (H.R. 644) would permanently extend: the deduction for companies that donate food to food banks; the deduction for donations of qualified conservation easements; the tax-free treatment of charitable contributions (up to $100,000) made directly from Individual Retirement Accounts for those over the age of 70½; and the reduction of the excise tax on investment income for private donations.

The "America's Small Business Tax Relief Act of 2015" (H.R. 636) would make permanent: Section 179 expensing; the reduced recognition period for built-in gains of S corps; the rule regarding basis adjustment to stock of S corps making charitable contributions of property.

Both bills face veto threats from President Obama, and opposition from the majority of House Democrats, given that no offsets have been provided for the provisions, which would cost a total of $93.2 billion over ten years. Despite this opposition and uncertainty about whether Senate Republican leaders are on board, House Ways and Means Committee Chairman Paul Ryan (R-WI) is mounting an aggressive piecemeal strategy to make select expired extenders permanent.

The approach is aimed at greasing the wheels of tax reform, which Ryan has told reporters would need to happen by this summer if it's going to have a shot in 2015. "If it goes past summer it is hard to see how it gets done," he said.

Next Up: R&D Credit. Ryan's tax-writing committee approved a second group of permanent extensions last Thursday related to the R&D credit and the deduction of state and local sales taxes. Votes during the markup fell along partisan lines. Once again, Republicans and Democrats sparred over the issue of offsets. Congressman Richard Neal offered a failed amendment that would prevent companies that choose to invert from claiming the R&D credit. The House is likely to take up the two bills next week before turning its attention towards education legislation, and the Ways and Means Committee is expected to mark up two additional permanent tax extender provisions next week before shifting its focus to trade.

Bill on 529s to Come to the House Floor Next Week. The chamber will take up Congresswoman Lynn Jenkins' bill to expand and strengthen 529 college savings plans (H.R. 529) before the end of the month. The bill was approved by House Ways and Means during its markup last week. The legislation would amend the tax code to improve 529 plans by allowing the purchase of a computer to be considered a qualified expense; removing the distribution requirements; allowing students who receive a refund of any qualified higher education expenses to redeposit those funds into a 529 plan without penalty.

Senate Finance OKs 17 Tax Bills. Members of the Senate Finance Committee passed 17 minor tax bills by voice vote during a markup last Wednesday. These bills, which addressed tax provisions across several industries including real estate, energy, beverage, and nonprofits, were deemed "noncontroversial" and enjoyed bipartisan support in the committee. In preparation for the markup, members on both sides of the aisle had submitted tax extenders and pension-related bills, but Chairman Hatch convinced members to defer these submissions until extenders and pension issues are taken up. Mr. Hatch gave no indication of how soon that might occur. Generally, Hatch has been reluctant to take up measures that would permanently extend any tax provisions as he would like to see those dealt with as part of comprehensive reform. The fate of these 17 bills remains up in the air. It is unclear if Senate Majority Leader Mitch McConnell (R-KY) plans to bring the package to the floor for consideration with a House revenue measure.

Sens. Reed and Grassley Introduce Bill to End Tax Write Offs for Corporate Penalties. The bipartisan "Government Settlement Transparency & Reform Act" would close a loophole that has allowed companies to deduct a portion of penalties incurred through unlawful activities. The bill would clarify what payments are considered punitive and non-deductible and require the government to work with the opposing party to reach an agreement on how settlement payments should be treated for tax purposes. At the time of settlement, the government would be required to file a return that would specify the expected tax treatment for penalties to be paid. The bill text is not yet available, but Senators Reed and Grassley introduced a similar bill in the last Congress, which can be read here.


Country-By-Country Reporting Templates Expected in April. OECD templates for CBC reporting are expected in April. While initial reporting for fiscal years beginning after Jan. 1, 2016, companies should make report available for filing as of Dec. 31, 2017. During last week's Tax Policy Council Institute conference, some concerns were raised regarding confidentiality of such information given that the reports would be made available to all countries that share them. The U.S. would also likely have to pass legislation to implement the reporting, despite suggestions that it could be done administratively under section 6001, 6038, 6038A, or 6038C of the tax code.

IRS Invites Comments on FATCA Forms. In an effort to reduce paperwork and regulatory burdens, the IRS is seeking comments on a number of Foreign Account Tax Compliance Act (FATCA) forms. They are: (1) Form 8957, for registering; (2) Form 8966, for reporting, and its cover sheet; (3) Form 8508-I, for waiver from electronic filing; and (4) Form 8809-I, for extensions of time to file. Comments should pertain generally to the burdens of collecting information, how it can be reduced, and ways to increase the quality, utility, and clarity of such information.

Special EU Tax Committee to Review State Aid. The European Parliament announced a special tax committee to review tax deals between multinational companies and EU member states. The mandate requires the committee to look into tax ruling practices as far back as Jan. 1, 1991, and review the way the European Commission treats state aid and the extent of its transparency. The initial review period is set for six months, and is expected to make recommendations for the future. This follows on the heel of a series of investigations of multinational companies in Luxembourg, Ireland, Belgium, and the Netherlands.


Both houses of Congress are in recess, returning the week of February 23.

Thursday, 2/19

Business Roundtable
The Business Roundtable holds a discussion on the importance of permanent tax reform in 2015. Speakers include Mark Weinberger, chair of the Tax and Fiscal Policy Committee and John Engler, president of the BRT. RSVP required – for more information, contact Amanda DeBard, adebard@brt.org.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions