Top Ten Items of Tax Policy Interest For 2015 #1

TaxConnections Member Annette Nellen

For the rest of 2015, I’m going to share my list of ten items from 2015 that I think have particular tax policy relevance.  It’s not a countdown so the start of this list today – #1, isn’t necessarily the biggest item of interest.

#1 – Congress can alter our tax system via a lot of non-tax bills.  In 2015, we saw ten bills enacted (as of 12/11/15) with tax changes. Yet, these bills were not intended to be tax bills, they all had a different primary purpose such as enacting trade deals or funding the Highway Trust Fund. Various tax changes were added in, many of which had been around for a while. For example, the GAO has been suggesting for years that additional information be required on Form 1098 mortgage interest statement. The change in due dates for some tax forms has also been talked about for some time and was even in Congressman Camp’s H.R. 1 (113rd Congress) tax reform bill.

Relevance – this is really not the best way to improve our tax system. Isolated changes, some of them significant, such as due date changes and changes in the audit procedures for partnerships, should really be part of a deliberate bill to improve our tax system. Efforts to reduce the tax gap, such as by denying passports to some delinquent taxpayers is good, but what else is also needed?  But, perhaps it is easier in Congress today to just tuck in changes that are of interest to enough members to be included or perhaps not of enough interest to others to hold up a bill.  Certainly, if there is some dire need to fix something, inserting it into the next bill to be voted on may make sense, but I think our tax system would be better served by looking at the system as a whole and improving it.

Here are the ten laws enacted in 2015 (as of 12/11/15) that included tax changes:

P.L. 114-10 (4/16/15) – Medicare Access and CHIP Reauthorization Act – Medicare changes and a process to remove Social Security numbers from Medicare cards.

P.L. 114-14 (5/22/15) – Don’t Tax Our Fallen Public Safety Heroes Act – modifies the Sec. 104 exclusion for injuries.

P.L. 114-26 (6/29/15) – Defending Public Safety Employees’ Retirement Act – adds a new exemption to the 10% early distribution penalty.

P.L. 114-27 (6/29/15) – Trade Preferences Extension Act – tax changes include requiring a Form 1098-T to claim certain education credits and deductions, denial of the refundable child tax credit when the Sec. 911 foreign earned income exclusion is used, and increased penalties for failure to file correct information returns (Sec. 6721) and payee statements (Sec. 6724).

P.L. 114-41 (7/31/15) – Surface Transportation and Veterans Health Care Choice Improvement Act – changes include new due dates starting with 2016 returns (see AICPA chart), a new basis consistency requirement and reporting obligation for certain estates, and additional information required for Form 1098 on mortgage interest.

P.L. 114-53 (9/30/15) – Continuing Appropriations Act – extends the Internet Tax Freedom Act to Dec. 11, 2015.

P.L. 114-60 (10/7/15) – Protecting Affordable Coverage for Employees – includes a definitional change to the Affordable Care Act.

P.L. 114-74 (11/2/15) – Bipartisan Budget Act of 2015 – makes significant changes to examination of certain partnerships.

P.L. 114-94 (12/4/15) – Fixing America’s Surface Transportation Act – denies a passport to individuals with seriously delinquent tax liabilities and removes the changed extended due date for Forms 5500 added by P.L. 114-41.

P.L. 114-__ (H.R. 2250, 12/11/15) – Further Continuing Appropriations Act, 2016 – Extends appropriations of P.L. 114-53 (9/30/15) through Dec. 16, 2015. Thus, extends Internet Tax Freedom Act to Dec. 16, 2015.

What do you think?

Original Post By:  Annette Nellen

See #2

Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.

Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.

Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.

Prior to joining SJSU, Annette was with Ernst & Young and the IRS.

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1 comment on “Top Ten Items of Tax Policy Interest For 2015 #1”

  • This is good stuff for people who live in America. Yet, for the ignored and unrepresented living abroad, this is more persecution to add to America’s growing list of tax crimes.

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