After Congress and the White House resolve the debt limit (the timing of which is uncertain), tax policymakers will turn their attention to a potential economic relief package being developed by House Republicans. While such a package is not likely to be considered in a Democratically-controlled Senate or by the White House, it could be an important marker establishing House Republican priorities for any tax negotiations later in the year as Congress considers government funding, FAA reauthorization, and a farm bill extension.

While there is a wide array of pending tax relief proposals waiting to be considered, it is expected that a cornerstone of any House Republican package will be legislation to address some of the so-called TCJA "extenders" – the section 174 R&D amortization fix, the section 163(j) EBITDA calculation fix, and 100 percent bonus depreciation. Supporters of these provisions will, in the first instance, focus especially on securing retroactive extensions (to 2022 in the case of sections 174 and 163(j) and to the beginning of this year with respect to bonus depreciation). Going forward, supporters would also ideally like to secure permanency of these important provisions, but revenue constraints – particularly Republican demands for deficit reduction – will likely temper such expectations.

A more realistic approach given the current fiscal environment would be for Congress to address the provision retroactively and then extend them through 2025. This would provide some short-term certainty to taxpayers in a budget-sensitive manner while lining up their expiration with the expiration of the TCJA individual and estate tax regimes, also scheduled for the end of 2025. Expect policymakers to balance these timing issues with revenue restraints in the coming weeks. #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.

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