President Biden, the House of Representatives, and the Senate recently negotiated and passed a bipartisan debt ceiling bill. While there was lot of political posturing from both sides of the aisle leading up to the compromise, those negotiations may have created a formula for how President Biden and Republican and Democratic Congressional leadership can successfully work together to pass major legislation later in the year. This could bode well for the working relationship between Representative Jason Smith (R-MO), Chairman of the House Committee on Ways and Means, and Senator Ron Wyden (D-OR), Chairman of the Senate Committee on Finance, as they will play a lead role developing tax legislation. 

After passage of the debt ceiling bill, the question becomes: what will happen next with each of the tax-writing committees?

Committee on Ways & Means

In the immediate future, the Committee on Ways & Means will be focused on advancing a tax relief and jobs package – the American Families and Jobs Act, which was release last Friday afternoon. The package is comprised of three bills: the Tax Cuts for Working Families Act (H.R. 3936), the Small Business Jobs Act (H.R. 3937), and the Build It in America Act (H.R. 3938).

The package focuses on extending key provisions from the Tax Cuts & Jobs Act of 2017 (TCJA), but not to the exclusion of targeted, non-TCJA provisions. Highlights include: 

• Extending bonus depreciation
• Extending immediate expensing for research and development (R&D) costs
• Extending the allowance for depreciation, amortization, or depletion for purposes of determining the income limitation on the tax deduction for business interest expenses
• Raising the 1099-K reporting limit
• Expanding the standard deduction

The Committee is scheduled to mark-up the package tomorrow morning. You can find additional information on the legislation in our recent Tax Flash here.

The Ways & Means Republican tax package will not receive support from Democrats and will be mostly a messaging exercise. That said, it is an opening proposal that could very well start discussions with Senate Democrats on a potential bipartisan tax deal later in the year. 

Committee on Finance

Chairman Wyden and the Senate Committee on Finance will start preliminary work on President Biden's nominee to be the next Internal Revenue Service (IRS) Chief Counsel, Marjorie Rollinson. The position serves as the IRS's top legal adviser, playing a key role coordinating with the Treasury Department on rulemaking and advising the Commissioner and all IRS divisions on enforcement actions. 

Rollinson brings a wealth of experience in government and private practice. She recently retired from EY and previously served as IRS Associate Chief Counsel, International. Chairman Wyden says he wants to move her nomination quickly, although the Committee will take some time processing the requisite questionnaires and background checks, after which there will be a committee hearing, a committee vote, and Senate floor action. 

The IRS has been without a Senate-confirmed Chief Counsel since January 2021. If confirmed, Rollinson will oversee all guidance on important Inflation Reduction Act tax provisions and other IRS and Treasury Department priorities. #TaxTake

Upcoming Speaking Engagements and Events

On June 20, Loren will present, "U.S. Tax Update - Global Trends with Local Impacts," at the TP Minds International 2023 Conference in London.

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