Pardon Our Dust
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NUMBER OF THE WEEK:42
Number of days until the start of the 2016 Republican National Convention in Cleveland, OH on July 18. Congress returns this week from the Memorial Dayrecess. Lawmakers are entering the last stretch of legislative days before they depart for the Republican and Democratic national conventions. Over theremaining six weeks, the congressional agenda will focus on the following big-ticket items:
- FAA reauthorization
- FY2017 appropriations bills
- Puerto Rico bill
- Defense authorization bill
- Comprehensive energy bill
- Tax reform proposals (i.e. House Republicans’ tax reform blueprint and Hatch’s corporate integration plan)
LEGISLATIVE LANDSCAPE
Spoiler Alert: Congress Will Be Late on Appropriations, Again. Say you’ve been living under a rock for the past decade and thought Congress could actually wrap up the appropriations process in time under regular orderthis year. Surprise! With a tight legislative schedule, Congress will unlikely pass all 12 annual appropriations bills before the July-August recess, whichmeans another continuing resolution (so-called “CR”) will be needed to keep the federal government running beyond the end of the fiscal year, Sept. 30…
Speaker Ryan to Unveil Poverty Plan Today. House Speaker Paul Ryan (R-WI) is scheduled to unveil a proposal to fight poverty today. The anti-poverty plan is expected to include a list of issues withthe current social welfare system and potential solutions. According to some sources, the plan will not include some of Ryan’s previous anti-povertyproposals, such as an expansion of the Earned Income tax Credit (EITC). Instead, the plan is expected to focus on laying the foundation for the Republicanvision of a social welfare system. According to a fact sheet and aWashington Post op-edby Chairman Kevin Brady (R-TX), the plan will include the followingfeatures…
Wyden: Presidential Nominees Should Release Tax Returns. “The American people expect transparency,” Senate Finance Ranking Member Ron Wyden (D-OR) told reporters. Wyden introduced the Presidential Tax Transparency Act (S. 2979), a bill that wouldrequire all presidential nominees to release their tax returns within 15 days of receiving the nomination of their party for the presidency…
Dismal May Jobs Report Fuels Republican Tax Blueprint. According tothe latest Labor Department report, the economy added only 38,000 jobs inMay, down from 123,000 in April. While other economic indicators werebetter, with unemployment at 4.7 percent, the lowest rate since 2007,Republican presidential and congressional candidates point to the numbers asevidence of President Obama’s poor economic policy…
Congressional Republicans Continue to Call for Koskinen’s Impeachment. On May 24, the House Judiciary Committee convened a hearing to consider the alleged misconduct of the Internal Revenue Service commissioner, John Koskinen.The Committee is contemplating an action that has not been taken in over 140 years, and has never been pursued at Koskinen’s rank…
Tax Break for Pass-through Entities.Rep. Randy Hultgren (R-IL) introduced H.R. 5374, the Bring Small Businesses Back Tax Reform Act,which would provide tax relief and reduce administrative burdens for smallbusinesses, including pass-throughs. Key provisions of the bill include…
REGULATORY WORLD
Treasury Moving at Full Speed on Proposed Earnings Stripping Guidance. The Treasury Department recently indicated that despite backlash and concerns from the business community, it has no plans to delay the finalization ofproposed anti-inversion and earnings stripping regulations…
OECD Seeks Input on Multilateral Instrument. For the past year, the Organization for Economic Cooperation and Development (OECD) has been collaborating with a group of 96 countries on a multilateralinstrument to modify bilateral tax treaties in relation to its efforts to combat tax base erosion and profit shifting (BEPS)…
IRS to Alter Certain Exceptions in Final Regulations for Embedded Loan Rule. In response to comments from various industry groups, the IRS has indicated that the final regulations for the embedded loan rule for notional principalcontracts with non-periodic payments will likely include a de minimis exception that allows for certain types of non-cash collateral…
IRS Targets Tax Avoidance in REIT Conversions. The Treasury Department today released new temporary and proposed regulations that will impact spinoffs and REIT conversions and modify the definition of“converted property” with respect to REIT transactions…
CAMPAIGN CORNER
- California, Montana, New Mexico, New Jersey, and South Dakota will hold their primary contests this Tuesday.
Here is the latest delegates count:
Source: AP & Google
LINE ITEMS
- The Electronic Tax Administration Advisory Committee (ETAAC) has scheduled an open meeting June 21 at the IRS headquarters in Washington, D.C. ETAAC members will address recommendations due to be published in their annual report to Congress by June 30.
- The IRS issued technical corrections clarifying proposed rules on corporate inversions. The proposed regulations (REG-135734-14) and related final and temporary rules, T.D. 9761, address transactions that are aimed at avoiding I.R.C. §§ 7874 and 367.
- The Tax Foundation released a study of 86 ways to revise the tax code, which may help inform the Congressional Republican blueprint on tax reform. The publication includes the dynamically scored revenue effects of each provision, as well as the effects of the provisions on the economy.
- Ernst & Young LLP executive director for Washington, D.C., Jefferson VanderWolk, will join the Organization for Economic Cooperation and Development (OECD) as head of the CTPA’s Tax Treaty, Transfer Pricing and Financial Transactions Division in July.
- On June 9, House lawmakers will debate two concurrent resolutions: the first, H. Con. Res 89, expresses the sense of Congress that a carbon tax would be bad for the U.S. economy, and the second, H. Con. Res. 112, express the sense of Congress opposing the $10.25 per barrel oil tax proposed in President Obama’s FY2017 budget.
- The Congressional Budget Office today welcomed its new deputy director, Mark Hadley, who is replacing Bob Sunshine.
- “Almost everyone agrees about what’s the right thing to do about taxing derivatives,” said Viva Hammer, legislation counsel at the Joint Committee on Taxation, commenting on Wyden’s recent proposal to simplify the taxation of derivatives. Speaking at an event hosted by the New York State Society of Certified Public Accountants, Hammer said that the mark-to-market proposal would not lead to valuation and cash-flow problems.
- Sen. Sherrod Brown (D-OH), a rumored vice-presidential candidate, is headed to the Center for American Progress today to argue in favor of further expanding the Earned Income Tax Credit (EITC) for working adults without children.
- The Congressional Budget Office released an analysis of President Barack Obama’s FY 2017 budget, concluding that despite the $2.1 trillion in tax increases, the plan would still boost growth. Specifically, the proposal would lift the gross national product by 0.2 percent over the next five years and by 1.8 percent between 2022 and 2026.
LOOKING AHEAD
Tuesday, 6/7
Senate Banking Committee
The full committee hearing on “Bank Capital and Liquidity Regulation.”Read more.
Wednesday, 6/8
House Financial Services Committee
The Task Force to Investigate Terrorism Financing Subcommittee holds a hearing on “The Enemy in our Backyard: Examining Terror Funding Streams from SouthAmerica.” Read more.
Thursday, 6/9
House Small Business Committee
The Economic Growth, Tax and Capital Access Subcommittee holds a hearing on“Bearing the Burden: Over-regulation’s Impact on Small Banks and RuralCommunities.” Read more.
Agency Activity
Wednesday, 6/8
Internal Revenue Service
The IRS holds a meeting by teleconference of the Taxpayer Advocacy Panel Taxpayer Assistance Center Improvements Project Committee on improving customerservice at the Internal Revenue Service. For more information, contact Otis Simpson, 202.317.3332.
Thursday, 6/9
Internal Revenue Service
The IRS holds a meeting by teleconference of the Taxpayer Advocacy Panel Tax Forms and Publications Project Committee on improving customer service at theInternal Revenue Service. For more information, contact Donna Powers, 1.888.912.1227.
Other Activity
Monday, 6/6
OECD International Tax Conference
The OECD hosts its 2016 International Tax Conference in Washington, DC, June 6-7.Read more.
Tuesday, 6/7
SIFMA: AMG Diversity and Inclusion Forum
SIFMA AMG’sDiversity and Inclusion Forum bringstogether industry professionals to share perspectives on ways to advance Diversity and Inclusion as a crucial ingredient in achieving an organization’spriorities and meeting the needs of clients as well as employees.American Enterprise Institute
AEI holds a conference on “U.S. Corporate Tax Reform in 2017: Exploring the Options.”Read more.
Wednesday, 6/8
SIFMA: FMS Regional Conference 2016
The Financial Management Society (FMS) Regional Conference provides finance and audit professionals with access and insight into emerging trends in thefinancial services industry and changes in accounting, tax, reporting, and regulatory rules and proposals.Read more.American Enterprise Institute
AEI holds a discussion on “Can Puerto Rico be Saved?”Read more.
Thursday, 6/9
The Tax Council
The council hosts its June 2016 legislative luncheon with special guest Sen. Ron Wyden (D-OR).SIFMA – Cyber Law Seminar
Join SIFMA for a Cyber Law Seminar. During this full-day program attorneys and compliance professionalswill gain insights and regulatory perspectives on cybersecurity law as well as strategies for how to take an active and valuable role in their firm’s cyberdefense plan.Bipartisan Policy Center
The BPC holds a discussion on “Securing Our Financial Future: Recommendations for Retirement Security and Personal Savings.”Read more.
For listings of all the week’s tax and financial services happenings, read below to find out how you can become a subscriber.
The McGuireWoods’ Tax & Financial Services Policy Group assists clients in understanding how the latest legislative and regulatory proposals anddecisions may impact their business and industry. To learn more about how our team can help you monitor, analyze, and navigate all relevant legislativeand regulatory developments, please contact any of our attorneys and consultants below at (202) 857-1700. For more information on how to subscribe toour weeklyTax Policy Update and tax news alerts, please contact Radha Mohan, rmohan@mwcllc.com, (202) 857-2944.
Lai King Lam