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Postponed Tax Reform Discussions Could Lead to Expiring Provisions on December 31, 2013

timerunningout_112113Although there is a strong appetite for comprehensive tax reform among leaders of the tax-writing committees, [Dave Camp (R-Michigan), Max Baucus (D-Montana)] it appears that the bulk of the tax reform debate will not occur until the second session of this Congress in 2014. Recent developments regarding tax reform indicate a shift in focus in the overall reform debate; discussions have now switched to the renewal of the expiring tax provisions such as the Work Opportunity Tax Credits (WOTC), Indian Employment Tax Credits, Federal Empowerment Zones and hundreds of others that are scheduled to expire December 31, 2013.

All year, there has been hesitancy among the tax-writing committees to discuss expiring provisions, except as they relate to comprehensive tax reform. Initially, it was anticipated that reform would be completed by the end of 2013 and those expiring provisions retained would be made permanent and folded into the new tax code. However, as the end of the year approaches, the possibility of completing tax reform by the end of 2013 is tenuous. Accordingly, unless Congress acts quickly, the expiring provisions will end before the enactment of tax reform.

Although anything can happen before Congress adjourns, there is little to suggest that advances in tax reform will come between now and the end of the year.  As a result, lobbying in favor of extending the expiring provisions is likely to intensify and continue at a high pace throughout December.

We will continue to monitor legislative developments associated with tax reform and issue further communications as more information becomes available.

Learn more about leveraging tax credits and incentives with help from ADP.


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