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| || LEGISLATIVE & TAX ADMINISTRATION NEWS|
Congressional Outlook Fall 2019
Congress returns from summer recess on Monday, September 9, and the fall legislative outlook looks eerily familiar.
Funding the government. Congress has until September 30 to pass all twelve appropriations bills to fund the government or risk another partial government shutdown. Odds are in favor of Congress passing a stop-gap funding bill, a continuing resolution, to get past the September 30 deadline. Beyond that, odds are harder to predict. (By the way, the Committee for a Responsible Federal Budget has an excellent primer on the appropriations process if you would like to learn more.)
Withholding for gig economy workers. The IRS has added new features to its withholding calculator to help self-employed and freelance workers accurately determine their withholding. According to IRS, “The new tool offers self-employed individuals, workers, retirees and other taxpayers a more dynamic and user-friendly way to calculate the amount of income tax they want to have withheld from either wages or pension payments.” We suspect the IRS will continue to focus this fall on urging taxpayers to check their withholding in anticipation of the next filing season—and suspect many of you will be doing the same with your clients.
Back in July, Congressional Democrats and the White House reached a budget deal, which both funded the government and increased the debt ceiling. Congress passed the budget bill right before August recess. Given the political tension and heightened partisanship of recent days, the budget compromise indicates both parties might have little appetite for another government shutdown.
To date, the Democrat-controlled House has passed 10 of the 12 appropriations bills, including the bill funding the IRS. The House bill actually increases IRS’ budget by 6 percent over last year ($12 billion total). The Senate, however, has yet to act on any appropriations bills. Senate appropriators are hoping to move as many bills as possible by September 30, but a continuing resolution to cover those agencies without enacted appropriations bills (including IRS) is all but guaranteed.
Keep in mind, at this time last year and even further into the fall, most prognosticators were not predicting that President Trump would reject a budget deal right before Christmas. That impasse led to the longest IRS shut down in history.
Outstanding tax bills. Of interest to NAEA members and their clients, tax extenders, retirement legislation, and TCJA technical corrections remain on the list of possible bills to watch this fall. Unfortunately, none of these individual bills, possibly even all three of them combined, would have the political capital to become a legislative driver. Another, more politically persuasive vehicle will likely be needed to move any type of tax legislation this year. Meanwhile, the system is gearing up for a presidential election during a major trade war with China and troubling economic indicators. The surer bet is against any tax legislation passing this year, but perhaps these are not the times for making big bets.
Hurricane season is in full swing. With Hurricane Dorian is making its way up the eastern seaboard and the Atlantic hurricane season peaking, IRS reminds everyone to develop a disaster/emergency preparedness plan. These tips work not just for coastal communities but anyone in the U.S. who could face extreme weather and natural disasters. IRS has also temporarily waived the dyed fuel penalty in Florida as a result of Hurricane Dorian.
After allowing time for California EAs to digest this news, and for Hurricane Dorian to make its way north from Florida, NAEA’s president, Jerry Gaddis, EA, MBA, would like to share an open letter to NAEA’s members regarding a recent decision NAEA’s board made with respect to recognizing the California Society of Enrolled Agents as an NAEA affiliate. Should you have any thoughts or questions, please provide feedback here.
News from the Office
We wanted to let members know we are in the process of an audit of our Facebook page, the goal of which is to clear non-NAEA members from that group. If we accidently remove you, please let us know! The crosswalk can be complicated by common names and by nicknames or people who use middle names rather than first names.
Affordable Care Act Insurers Fee
Notice 2019-50 provides the applicable annual fee for health insurers in 2020, assuming Congress does not act to suspend the fee like it did for 2019.
September’s Tax News from the Franchise Tax Board is hot off the presses.
The Department of Revenue is offering a webinar that covers using the Iowa e-file system, including best practices for cybersecurity “hygiene.”
The Kentucky Standard Deduction for 2020 will be $2,650.
Open enrollment in the Texas prepaid college tuition program began on September 1 and runs through February 29, 2020.
| || EVERYTHING BUT THE KITCHEN SINK|
Less Tax and Fewer Calories = White Claw Summer. The pool-side drink of summer 2019, White Claw Spiked Seltzer, is the “guilt-free” result of excise tax reduction.
Who Gets the Opportunity with Opportunity Zones. A New York Times article suggests the Opportunity Zone program will not do much to revive distressed areas, but will be a boon to wealthy investors.
Past as Prologue. A new study finds the charitable deduction has always been, by design, a tax benefit for upper income taxpayers.
Passport Revocations. A bill back in 2015 requires IRS send to the State Department a notice when an individual has a seriously delinquent debt and these cases are starting to make their way through the system, including at the Tax Court. A Procedurally Taxing post outlines the new IRM procedures.
Are You Ready for Some Football? The NFL season officially started last night (Green Bay vs. Chicago) and the tax man will take his share if you plan on betting in states where it is now legal.
Garfield Would be So Proud. A large house cat ambling near an elementary school in Vancouver was mistaken for a cougar.
“Summer’s lease hath all too short a date.”
– William Shakespeare
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NAEA E@lert | Volume 1: Issue 40
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