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TAX TAKE: Closing Time: Potential Year-End Tax Deal?

Tax Alert

Last week, top Congressional appropriators reached a bipartisan, bicameral agreement on a year-end omnibus spending package (omni), which the House and Senate are attempting to pass by Friday, December 23, to send to President Biden's desk. That package is the "last train leaving the station" – the last legislative vehicle and only opportunity for major tax legislation to be included and passed this year. 

As of press time, the prospects for Congress attaching tax legislation to the omni were dimming, with no sign of negotiators nearing a tax deal. Since the omni is bipartisan, any tax legislation would also need to be bipartisan and attain the support of at least 60 Democratic and Republican Senators, which is not an easy task. As Tax Take has been reporting, Democrats have been advocating for an extension of the expanded child tax credit (CTC) provisions from the American Rescue Plan and Republicans are advocating for business tax relief provisions, such as the section 174 research and development (R&D) amortization fix, section 163(j) interest expense deduction, and bonus depreciation. Although the White House last week signaled a willingness to negotiate a scaled-back CTC provision, that doesn't seem to have moved the needle so far in terms of an agreement, with both sides at a standstill. 

This week will be critical for a potential tax deal, especially the early part of this week. If by the time you read this Monday morning there are still not any positive signs from Congress on a tax negotiation, it's unlikely that it will come together so late in the year. House and Senate leadership are intent to wrap up 2022 by this Friday and they need lead time to piece the omni together and have it pass both chambers. It's closing time. #TaxTake

Upcoming Speaking Engagements and Events

On January 23, Loren will present, "The Future of Tax Policy," at the USC Gould School of Law 2023 Tax Institute in Los Angeles.

Loren will moderate a panel titled, "The OECD & Global Tax Policy: What's Next?" at the DC Bar 2023 Tax Legislative and Regulatory Conference on January 26.

On February 10, Loren will speak at the ABA Section of Taxation 2023 Midyear Meeting in San Diego. She will participate in a panel discussion entitled, "Riding the ICAP and APA Wave."

In the News

In Thomson Reuters, Marc provided possible scenarios for the lame duck session and his outlook for 2023. "I'm very hopeful that there is an omni this year and there is a tax title," Marc said. Taxpayers should not expect major changes to the tax code next year. Instead, the parties will spend 2023 establishing their policy platforms ahead of the 2024 elections.



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