Creating a Rising Tide of Support
Monday January 22, 2018
Bipartisan Tax Reform Conference Committee
Both House and Senate leaders have appointed members of the bipartisan conference committee to finalize the Tax Cuts and Jobs Act. The House group will be led by eight Republican and five Democratic members. The Senate will send eight Republican and seven Democratic members.
The conference committee will be chaired by Rep. Kevin Brady (R-TX). He is Chairman of the House Ways and Means Committee. Other tax writer members are House Ranking Member Sander Levin (D-MI), Senate Finance Committee Chairman Orrin Hatch (R-UT) and Senate Ranking Member Ron Wyden (D-OR).
There are major differences in the House and Senate bills that must be reconciled by the conference committee.
Senators Debate Tax Reform Bill
Following a Senate vote of 51 to 49 to pass the Tax Cuts and Jobs Act, Senate leaders have appointed the bipartisan conference committee members. Key senators gave opinions this week on the progress of the comprehensive tax reform bill.
Senate Majority Leader Mitch McConnell (R-KY) supported the bill. He called it a "once in a generation" opportunity for comprehensive tax reform.
McConnell stated, "Earlier this week, our colleagues in the House voted to work with the members of the Senate to produce a final bill to send to the President's desk. And later today, the Senate will do the same. We will vote to join our colleagues in a conference to finish our work on tax reform. The American people deserve taxes that are lower, simpler, and fairer. By voting to go to conference, we will be one step closer to getting it done."
Senate Finance Committee Chairman Orrin Hatch (R-UT) highlighted the "years in the making" aspects of the bill. He noted, "This bill is going to boost the economy, grow jobs, and finally help end the wage stagnation we have been faced with for years. This bill is going to unleash the American spirit; bringing businesses back home where they started, and encouraging other businesses to both come from abroad, as well as to grow from within. Once again, America is open for business."
Sen. Ron Wyden (D-OR) is the Ranking Member of the Senate Finance Committee. He has steadily opposed many of the provisions in the bill. Wyden advocates larger tax cuts for the middle class.
Wyden stated, "The truth is Republicans from the House and Senate are hashing out their differences right now behind closed doors. They are packing the bill with even more goodies and loopholes for special interests. There is no telling what swamp creatures have crawled their way up Capitol Hill to get their fingers on this bill at the eleventh hour. The basic proposition they offer - taking money and healthcare from middle class Americans to pay for tax cuts for multinational corporations and the politically powerful - that proposition is not going to change."
IRS Guidance on Donor Advised Funds
In Notice 2017-73; 2017-51 IRB 1, the Service discussed three issues for Sec. 4966(d)(2) Donor Advised Funds (DAFs). The Notice provides interim guidance on DAF grants to charities who sponsor an annual donor dinner, DAF grants to charities to whom the donor has made a pledge and the use of DAFs to circumvent private foundation excise taxes. The Service requests submission of comments on these issues by March 5, 2018.
Applicable Federal Rate of 2.6% for December -- Rev. Rul. 2017-24; 2017-49 IRB 1 (17 Nov 2017)
The IRS has announced the Applicable Federal Rate (AFR) for December of 2017. The AFR under Section 7520 for the month of December is 2.6%. The rates for November of 2.4% or October of 2.2% also may be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments the lowest AFR is preferable. During 2017, pooled income funds in existence less than three tax years must use a 1.2% deemed rate of return.
Published December 8, 2017