After a recess that was shortened by the consideration of the Inflation Reduction Act (IRA), we now enter a hurry-up-and-wait September. Congress returns (the Senate today, followed by the House next week) to what is anticipated to be a period of little legislative activity and dominated by political messaging. In the final push to the November mid-term elections, Democrats will be lauding the IRA – such as the benefits conferred on the environment through the green energy provisions, the reduction in the deficit and prescription drug savings, to name a few. Republicans, by contrast, will criticize the tax increases contained in the IRA, as well as the impact of the increased Internal Revenue Service funding on taxpayers.

This political discourse will leave little room for actual progress on new tax legislation. That said, we anticipate staff-level discussions in an effort to prepare a lame duck tax package for consideration at the end of the year. Staff will be particularly focused on determining an appropriate delay of section 174 research and development (R&D) amortization that will not only provide retroactive relief for 2022, but could provide taxpayers certainty for at least some period of time going forward. In addition, there is the need to negotiate a final retirement savings package based on the House-passed bill and the bills that have passed the Senate Committees on Finance and on Health, Education, Labor, and Pensions. Support in both chambers for retirement legislation is bipartisan, upping the odds that a final bill will clear Congress before the end of the year. #TaxTake

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