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May 29, 2015
Finance Committee's Small-Bore Tax Bills Stall in Senate
by Stephen K. Cooper

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For nearly a decade, Senate Finance Committee member Rob Portman, R-Ohio, has been working to boost the status of enrolled agents by setting up a Treasury-approved certification program for properly trained tax professionals who help Americans sort out their returns.

Portman's latest effort, the Enrolled Agent Credential Act (S. 422), won unanimous support when it passed a Finance Committee markup in mid-February (as S. 914), setting up the noncontroversial legislation for what the junior senator from Ohio hoped would be swift passage on the Senate floor.

But Portman's bill, like the 16 other pieces of small-bore tax legislation passed by committee members just before Valentine's Day, has gone nowhere. While the Senate has debated weightier matters such as trade, executive nominations, and foreign policy, the tax bills remain in limbo, awaiting approval from Senate leadership to move ahead.

"We're hopeful we can hotline it and get it done by unanimous consent," Portman told Tax Analysts. "I've been working on that damn thing for 10 years. It goes back to my House days." Portman represented the second district of Ohio from 1993 to 2005.

In a series of interviews with Tax Analysts, Senate tax aides and lawmakers from both political parties said that the package of targeted tax relief bills is unlikely to move beyond the committee level until an appropriate way to pay for the measures is identified. The bipartisan bills address a variety of issues, including new IRS regulations, energy tax credits, and charitable giving. Most have negligible revenue impact, according to Joint Committee on Taxation estimates.

Lawmakers had tentatively settled on offsetting the cost of the miscellaneous bills by providing a 100 percent continuous levy on Medicare providers with delinquent tax debt, several aides said. However, that provision was used in H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, signed into law by President Obama on April 16.

"I'm not surprised. Pay-fors are highly sought after," said Finance Committee member Thomas R. Carper, D-Del., when asked about the commandeered revenue offset used in H.R. 2. He explained that the same revenue offsets are repeatedly offered on multiple bills until one becomes law, then the offsets are taken out of circulation.

Carper added that the small-bore tax bills were not first in the queue of issues that needed the Senate's attention this year. "We didn't get a whole lot done the first three months here, so there's pent-up demand to get some important stuff done," he told Tax Analysts. "The bills we reported out, they're meritorious, but they're not showstoppers."

So far, Senate Majority Leader Mitch McConnell, R-Ky., and Senate Minority Leader Harry Reid, D-Nev., have not begun negotiations on scheduling the package of tax bills for floor consideration, the aides said. At the February markup, Finance Committee Chair Orrin G. Hatch, R-Utah, told committee ranking minority member Ron Wyden, D-Ore., that he would sign on to a joint letter with him asking McConnell and Reid to provide for an amenable legislative process to advance the bills.

Without an agreement at the leadership level to move the bills by unanimous consent, lawmakers will likely try to amend the tax legislation on the Senate floor, turning the noncontroversial package into a "Christmas tree," Portman said.

"There could be all kinds of things added to them. People look for those vessels," Portman said. "That's one reason it's hard to take even a small bill to the floor. . . . People want those vehicles."

Finance member Chuck Grassley, R-Iowa, expressed concern about the tax legislation and said he had recently asked committee tax staffers about the prospects for passage. "The staff said they're still working on it," Grassley said, adding that the measures are basically consensus bills and that he expected they would reach the Senate floor.

Asked about the lengthening wait for floor consideration, Hatch expressed optimism about the process. "They need to be brought up. We'll get them done," he said.

The bills approved by the committee in addition to S. 914 are the following:

  • S. 903, would improve access to and the administration of the U.S. Tax Court.
  • S. 904, the Craft Beverage Bond Simplification Act of 2015, would modify alcohol excise tax filing requirements and remove the alcohol bonding requirements for specific taxpayers.
  • S. 905, would modify the alternative tax for small property and casualty insurers.
  • S. 906, the Cider Investment and Development through Excise Tax Reduction (CIDER) Act, would modify the excise tax on cider.
  • S. 907, the Wounded Warrior Tax Equity Act of 2015, would shorten the tax collection period for taxpayers hospitalized for combat zone injuries.
  • S. 908, the Charitable Agricultural Research Act, would provide special rules concerning charitable contributions to agricultural research organizations.
  • S. 909, the Philanthropic Enterprise Act of 2015, would provide an exception to the private foundation excess business holdings rules for some philanthropic business holdings.
  • S. 910, would clarify the special exclusion rule for reimbursements under specific government healthcare plans.
  • S. 912, would provide an exclusion for amounts received under student work-learning-service programs.
  • S. 913, would create a waste-heat-to-power investment tax credit.
  • S. 915, the Real Estate Investment and Jobs Act of 2015, would modify provisions regarding real estate investment trusts, regulated investment companies, and the 1980 Foreign Investment in Real Property Tax Act.
  • S. 916, the Don't Tax Our Fallen Public Safety Heroes Act, would exclude from gross income some compensation received by public safety officers and their dependents. A House version of the bill, H.R. 606 , was signed into law by President Obama on May 22.
  • S. 917, the LNG and LPG Excise Tax Equalization Act of 2015, would convert the tax on liquefied natural gas and liquefied petroleum gas to an energy-equivalent basis.
  • S. 918, the Notice for Organizations That Include Charities is Essential (NOTICE) Act, would require the IRS to notify exempt organizations before revoking their exempt status for failure to file information returns.
  • S. 919, would exclude from gross income some clean coal power grants.
  • S. 920, the Military Spouse Job Continuity Act of 2015, would create a military spouse job continuity credit.

Follow Stephen K. Cooper (@scoop1200) on Twitter for real-time updates.

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