Senate Finance Chairman Releases Tax Reform Discussion Drafts
November 27, 2013
On October 30, in a Senate floor statement, Senate Finance Committee Chairman Max Baucus (D-MT) continued his longstanding efforts to move forward on tax reform, stating, "With so many people out of work, with economic growth still too slow, with a competitiveness gap costing us jobs and revenue, it's time for us to act. It's time for us to reform our tax code." In an effort to build momentum for a major overhaul of the tax code, Baucus and the House Ways and Means Committee Chairman, Dave Camp (R-MI), spent part of the summer traveling the country to get input and feedback from the American people on the nation's tax system.
Congressional leaders in both the House and Senate have been reluctant to fully embrace a broad tax reform process, but both Chairmen have continued moving forward with committee work and outreach to other policymakers. Camp's goal was to release a House version of a tax reform bill and have the Ways and Means Committee mark it up by the end of this year, but that prospect seems to be slipping, stymied in part by the October government shutdown and the overarching budgetary debates.
In the meantime, in an effort to maintain progress in the Senate, Baucus recently released:
- Discussion draft legislation on international tax reform, on November 19.
- Discussion drafts for tax administration reforms, on November 20.
- A staff discussion draft on cost recovery and tax accounting rules, on November 21.
NACUBO anticipates seeing additional proposals on other topics in the near future.
According to the Senate Finance Committee, "the discussion drafts are based on bipartisan ideas and incorporate bills introduced by both Republicans and Democrats." Notably, the tax administration draft calls for institutions of higher education to report "payments received" as opposed to selecting to report either "payments received" or the "aggregate amount billed" on the 1098-T.
President Obama's FY14 budget request (delivered April 10, 2013) also called for requiring institutions of higher learning to report on IRS Form 1098-T amounts paid rather than amounts billed for qualified tuition and related expenses. The White House had also proposed mandating that any entity issuing a scholarship or grant in excess of $500 that is not processed or administered by an institution report the scholarship or grant on Form 1098-T-this suggestion was not included in the Senate discussion draft.
In the discussion draft on cost recovery and tax accounting, Section 179D, the commercial deduction for energy efficiency improvements would be eliminated. Congress permitted government building owners (including state universities) to allocate the 179D deduction to one or more persons "primarily responsible for designing the property," which can include architects, engineers, contractors, environmental consultants, or energy services providers. NACUBO had supported efforts to extend authorization of the deduction and to expand Section 179D to nonprofits, such as independent higher education institutions.
NACUBO staff are further reviewing the proposals and also welcome any additional observations or feedback you may have on the discussion drafts.
Director, Federal Affairs
Director, Tax Policy
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