IRS Warns Senate Tax Refunds Could Be Delayed
There’s another reason to be displeased with congressional gridlock.
IRS Commissioner John A. Koskinen is warning Congress that passing tax legislation reviving expired tax breaks — known as tax extenders — in December or later could delay refunds for millions. And if the legislation is passed retroactively in 2015, it could force millions to file amended tax returns, he warned in letters to top lawmakers. He urged them to pass the legislation by the end of November.
Senate Finance Chairman Ron Wyden, D-Ore., seized on the letter Tuesday to push for swift passage of his two-year tax package known as the EXPIRE Act.
The Finance Committee passed the package in April but it stalled on the floor in May after Finance Committee ranking member Orrin G. Hatch, R-Utah, sought to attach a provision repealing the medical device tax, which helps fund the Affordable Care Act.
“It has been over six months since the Finance Committee passed the EXPIRE Act with strong bipartisan support,” Wyden said. “As the 2015 filing season begins to loom large, it is more urgent than ever that Congress moves in a decisive and bipartisan way to renew expired tax provisions that will give taxpayers the certainty they need to plan their finances.”
The House voted in June to make permanent Section 1 of the tax breaks, 179 expensing. The change allows small businesses to get their entire depreciation deduction in one year, rather than taking it a little at a time over the term of an asset’s useful life — which can be up to 39 years.
Since the extenders proposal was derailed on the Senate floor, supporters argue its best hopes of passage lies in the lame duck, which is set to begin Nov. 12 in the Senate.
“As the economy begins to show signs of strength, uncertainty from the federal tax code is the last thing American businesses and families need as they look to grow and invest,” Wyden said. “Congress needs to act swiftly on these important tax provisions so it can get to work on a comprehensive overhaul of the tax code and lift the fog of uncertainty from taxpayers.”
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