House Republicans used the April 15 individual tax filing deadline last week to highlight their tax legislative priorities and pass bills that would repeal the estate tax, permanently extend the state and local sales tax deduction, and modify many tax-exempt and IRS administrative rules.
The thrust of the legislative effort was largely political, as most of the bills stand little chance of enactment this year. H.R. 1105 would repeal the estate tax at a cost of $269 billion over 10 years. Estate tax repeal has long been part of the GOP platform, but H.R. 1105 would go further than prior proposals by retaining the step-up in basis for inherited assets at death. The bill passed 240 to 179 on a party-line vote.
H.R. 622 would make permanent the election to deduct state and local sales tax in lieu of state income tax. This election expired at the end of 2014 along with 50-plus other popular provisions known as “extenders.” There is broad support for reviving most of these provisions at least temporarily, and H.R. 622 passed easily on a 272–152 vote. But lawmakers are not expected to deal with the expired provisions until much later in the year, and will likely address them as part of a larger package.
The House also passed seven bills targeting IRS administrative functions. The bills are largely a response to the IRS’s heavily criticized handling of investigations into the tax-exempt status of many organizations in 2012 and 2013. All the legislation was approved easily with bipartisan votes, and includes provisions which would do the following:
- Require the IRS to fire employees who threaten audits for political reasons (H.R. 709)
- Allow the IRS to disclose internal investigations of illegal activity by employees (H.R. 1026)
- Prohibit IRS officials from using personal email accounts for government business (H.R. 1152)
- Provide an administrative appeals process for adverse tax-exempt determinations (H.R. 1314)
- Change the process for organizations applying for tax-exempt status under Section 501(c)(4)(H.R. 1104).
Despite the bipartisan support, the bills don’t appear headed for enactment any time soon. Senate tax writers have not announced plans to consider them.