Congress must renew dozens of expired tax breaks soon or risk delaying the tax-filing season, which normally begins in late January, Internal Revenue Service Commissioner John Koskinen said Tuesday.
The package of so-called tax extenders expired in January for the 2014 tax year and beyond. House and Senate tax-writing committees moved separate legislation before Congress went into recess earlier this year. It is expected to reconvene in a lame-duck session after today's election.
Mr. Koskinen urged lawmakers to put extenders at the top of their agenda when they return to Washington.
“If the uncertainty over extenders continues into December, the IRS could be forced to postpone the opening of the 2015 filing season,” Mr. Koskinen said at an American Institute of CPAs conference in Washington. “Our hope is that lawmakers will provide a clear policy direction for the extenders legislation before the end of the month.”
Earlier this fall, Republican leaders of the House Ways and Means Committee as well as the Senate Finance Committee
expressed optimism that the extenders would be approved during a lame-duck session. The Democratic chairman of the Senate panel also urged completion of the work.
“Congress needs to act swiftly on these important tax provisions so it can get to work on a comprehensive overhaul of the tax code and lift the fog of uncertainty from taxpayers,” Sen. Ron Wyden, D-Ore. and Senate Finance Committee chairman, said in an Oct. 7 statement in response to an Oct. 6 letter from Mr. Koskinen regarding extenders.
In his appearance on Tuesday, Mr. Koskinen was more pointed about the need for Congress to act quickly. He is hopeful legislators are getting the message.
“There have been a number of indications that people think this is one of the issues that has to be addressed,” Mr. Koskinen told reporters following his speech. “The simpler it is and the earlier it is, the better it is for us and for taxpayers.”
The extenders include a deduction for contributions to charitable organizations directly from individual retirement accounts as well as tax breaks for mortgage interest premiums, state and local sales taxes, and small business expenses.
The last time Congress renewed the extenders, in January 2013, it came after they had already expired for the previous tax year.
The
AICPA is pushing Congress not to put taxpayers in the same situation.
“It's a very unsettling environment, trying to predict whether Congress will approve a rule retroactively,” said Melissa Labant, AICPA director of tax advocacy and professional standards. “If it's Jan. 1 or Jan. 2, it's disastrous.”
The uncertainty over tax extenders is only one challenge facing taxpayers this year. For the first time, the IRS will be dealing with provisions of the health care reform law that affect individual taxes.
“It may be the most complicated filing season we've ever had,” Mr. Koskinen said.
