The House on December 20, 2018, approved by a 220-183 vote the "Retirement, Savings, and Other Tax Relief Act of 2018 and the Taxpayer First Act of 2018," addressing two tax extender provisions, retirement policy, Tax Cuts and Jobs Act (TCJA) technical corrections, IRS reform provisions, and disaster relief.

There is currently no expectation that the bill will be taken up in the Senate, where Democrats, whose support would be needed to reach 60 votes in that chamber, are opposed to the TCJA fixes. Additionally, both chambers are contending with a potential partial government shutdown after December 21 as President Trump signaled he will not sign the Senate-passed "continuing resolution" (CR) to continue government funding through February 8 for FY2019 appropriations measures that have not yet been enacted because the CR does not include border wall funding. The House is attempting to add in the funding, with the overall outcome uncertain.

The year-end tax bill, put forward by Ways and Means Committee Chairman Kevin Brady (R-TX), was last modified on December 10, with the addition of two extender provisions, to make the railroad track maintenance credit permanent and extend and phase out incentives for biodiesel and renewable diesel. No other tax extenders are addressed.

In floor debate before the vote, Chairman Brady predicted that, if the bill is not enacted, Democrats would take up its elements early next year. The House on December 20 also separately approved the IRS reform measure that is also part of the larger bill, the Taxpayer First Act of 2018 (H.R. 7227), in the event it could be approved by the Senate as a standalone. It would establish an IRS Independent Office of Appeals, among other provisions.

TCJA technical corrections would:

• Seek to alleviate certain issues arising under the TCJA with the so-called downward attribution rule, which applies to controlled foreign corporations
• Apply the Section 199A pass-through deduction for qualified REIT dividends to both direct holders of REIT stock and indirect shareholders of REITs through mutual funds
• Set qualified improvement property as 15-year property under the modified accelerated cost recovery system (MACRS), which also would make such property eligible for 100% bonus depreciation
• Provide that modifications made to NOL carryforwards and carrybacks apply to net operating losses arising in tax years beginning, not ending, after December 31, 2017
• Clarify that victims may deduct attorney's fees related to sexual harassment or abuse cases
• Clarify that the IRS will not apply any non-Section 965 tax payments (e.g. estimated taxes) to a taxpayer's Section 965 tax liability

With regard to ACA taxes, the package would:

• Delay the medical device excise tax an additional five years, through 2024
• Delay the excise tax on high-cost employer-sponsored health coverage (known as the "Cadillac Tax") an additional year, through 2022
• Delay the annual fee on health insurance providers (known as the "Health Insurance Tax" or "HIT") an additional two years, through 2021
• Repeal the 10% excise tax on indoor tanning services

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