Late last month, the Tax Teams set up by Republicans on the House Ways and Means Committee threw open the doors for comments on their work to address next year's expiring tax provisions enacted by the Tax Cuts and Jobs Act (TCJA). Individual rates, estate taxes, the cap on deducting state and local taxes (SALT), the section 199A deduction for passthrough income, and bonus depreciation are just some of the major tax provisions in play. And the corollary question about offsetting some or most of the extensions with new revenue arguably puts the entire tax code in play.

Let's take a closer look at the Ways and Means announcement for more insight on the request for comments. On its face, it provides the basic instructions on when and how to deliver input. Comments should indicate the relevant Tax Team(s) in the subject/body of an email with comments attached as a Microsoft Word document. The deadline is October 15, 2024.

Before taxpayers pick up their pens and start drafting a comment letter, there are some things to consider. First, the Tax Teams share overlapping policy areas, so commenters may want to file comments with multiple teams. For example, it makes sense that comments on the research and development (R&D) credit would be relevant to the American Manufacturing, U.S. Innovation, and Global Competitive Tax Teams. 

And just because the announcement requests comments on what can be perceived as quite a leading topic – i.e., "public input on Biden's 2025 planned tax hike on American families and businesses" – does not mean that the submissions need to take such a partisan bent. In fact, to the extent they are comfortable, taxpayers may want to consider submitting comments of a more general nature to all the tax-writing committee staffs. After all, the House and Senate are narrowly divided and control of either chamber could change in 2025.

Another factor to consider is that business-oriented trade associations may take the lead ahead of individual companies in making the broad case for TCJA extensions. As such, taxpayers may want to defer to these trade association submissions for advocacy related to broadly applicable provisions (e.g., R&D amortization or bonus depreciation) and instead use this opportunity to raise industry- or company-specific tax issues that could be addressed as part of a package in 2025. It is our understanding that comments filed with the Tax Teams will remain confidential, so taxpayers may take advantage of this opportunity with less trepidation. Nevertheless, in deciding whether to comment, taxpayers should consider that their submissions could be broadly distributed among congressional staffs.

In the Senate, Finance Committee Ranking Member Mike Crapo (R-ID) is similarly readying a set of Republican working groups to prepare for 2025 regardless of which party is in control. Official confirmation is pending, but the groups will reportedly coalesce around the issues of individual taxes, business measures, international tax, retirement, community development, and energy. We anticipate that similar to their counterparts in the House, the Senate Finance Committee Republican working groups will also establish a process to solicit taxpayer feedback.

So far, Democratic taxwriters in the House and Senate have been more circumspect about formal steps to prepare for 2025, although all members have already spent considerable time grappling with the pending expiration of TCJA provisions. 

The Tax Teams' requests for submissions is a welcome development, as taxpayers are anxious for a mechanism to contribute to the 2025 tax reform effort. #TaxTake
 

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