TAX TAKE: I Don't Want to Wait: Impact of the Forthcoming JCT Blue Book
As previously noted in Tax Take, given the lack of contemporaneous legislative history, all eyes are on the pending release of the Joint Committee on Taxation's (JCT) Blue Book to provide an explanation of the tax provisions included in the Inflation Reduction Act (IRA), the Consolidated Appropriations Act, 2023, and other legislation enacted in the 117th Congress. The Blue Book effectively functions as something akin to a "final word" from Congress on recently enacted legislation.
Although many initially hoped to see the Blue Book released in the first quarter of this year, the time horizon has now stretched to a release before the August congressional recess. A limited preview of at least a portion of the Blue Book was contained in the JCT's hearing pamphlet accompanying a recent House Committee on Ways and Means hearing on IRA green energy provisions in April. The pamphlet followed the Blue Book format in explaining present law prior to the enactment of the IRA and then the changes made by the IRA but without the identification of potential technical corrections that has become a standard and closely watched portion of the Blue Book. Presumably, the new Blue Book will include observations on various technical corrections that may be appropriate in time for their consideration later this year.
The Blue Book will be an invaluable resource in explaining Congressional intent behind the enactment of tax provisions in the 117th Congress. This edition will be especially important given the accelerated process under which the IRA and other legislation were considered and enacted, which precluded the development and release of committee reports, conference reports, and other supplemental legislative materials.
The Blue Book is also expected to have significant influence on the development of administrative guidance. Although the Department of the Treasury and the Internal Revenue Service (IRS) have dedicated tremendous resources to the administrative guidance process, notices – rather than proposed regulations – have been issued on many of the new tax provisions. With so many proposed regulations packages pending, the issuance of this year's Blue Book will have a major impact on the further development of these regulations. #TaxTake
Upcoming Speaking Engagements and Events
Loren will present "Pillar Two and Potential U.S. Response," a panel discussion at the 2023 Texas Federal Tax Institute Annual Conference on June 7.
On June 20, Loren will present, "U.S. Tax Update - Global Trends with Local Impacts," at the TP Minds International 2023 Conference in London.
In the News
Jorge commented on the IRS's new direct e-file pilot program in Bloomberg Tax. While the specifics have yet to be worked out, the IRS faces several challenges including the size and scope of the program. Jorge said a more narrow pilot program would be easier for the IRS to administer, while a broader pilot would be "more challenging and carry more complications for the IRS from a systems perspective."
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