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TAX TAKE: I Like to Move It, Move It – What House Republican Tax Priorities Could Move in Lame Duck?

Tax Alert

As part of the House Republican rollout of their "Commitment to America" platform, the Jobs & the Economy Task Force (Task Force) released a set of "targeted tax reform" proposals. This week, we look at proposals that could receive serious consideration for enactment in the lame duck session following the November elections.

Advancing tax legislation, particularly tax relief, will be challenging in the short term – even though consideration of a likely omnibus appropriations bill during the lame duck session could provide an excellent opportunity for the inclusion of a tax title. Balancing the competing priorities of both parties will likely result in negotiations that involve pairing an expanded child tax credit (CTC) with some form of business tax relief. Such a delicate balance could produce a large tax package that is not paid for - or negotiations could just as easily collapse.

Nevertheless, we anticipate that if a package does emerge, a number of proposals for business tax relief highlighted by the Task Force will receive serious consideration for inclusion, including research and development (R&D) expensing (although on a temporary, rather than permanent, basis as suggested by the Task Force) and the section 163(j) interest expense deduction EBITDA limitation fix. The fact that these proposals also enjoy significant Democratic support also suggests that their chances of success for inclusion in any lame duck package are relatively strong. Should the prospects for a lame duck package dwindle, any discussion of these popular provisions likely would involve revenue offset considerations, thereby complicating the path to enactment. Moreover, as we get deeper into 2023, the prospect of the pending 2024 elections will hover over any substantive discussions, also posing a significant challenge.

Next week, we will look at the Task Force's other proposals that probably won't advance in the near term but will comprise the thrust of the GOP’s major messaging themes as we head into the 2024 election cycle. #TaxTake

In the News

International tax practitioner Jeffrey Tebbs has returned to Miller & Chevalier. "When deciding to return to private practice, I knew I wanted to join a firm that reflected the lessons I've learned sitting in the client's chair. The tax team at Miller & Chevalier is dedicated to understanding each client's unique business and is committed to crafting solutions that balance competing priorities in real world conditions. Those commitments, combined with a teamwork-oriented approach, allow the firm to stretch well beyond mere service providers and into the role of trusted advisors. I'm delighted for the opportunity to be back working alongside this exceptional team," added Tebbs.

Our fellow Tax Members George Hani and Jim Gadwood are now the co-authors of Federal Tax Accounting. Originally authored by our colleague Steve Gertzman, the treatise has become a leading authority on the topic and has been cited by the U.S. Tax Court, IRS, and other tax commentators. George and Jim have assumed responsibility for maintaining the treatise through semiannual supplements

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