Tax News Update    Email this document    Print this document  

Senate Majority Leader Mitch McConnell (R-KY), House Speaker Nancy Pelosi (D-CA), Senate Democratic leader Chuck Schumer (D-NY) and House Republican leader Kevin McCarthy (R-CA) have met repeatedly on additional coronavirus spending that could be attached to an omnibus appropriations bill, and reportedly agreed to drop the controversial issues of state and local government funding and liability protections. Treasury Secretary Steven Mnuchin joined the meetings by phone. "Congressional negotiators are on the brink of a coronavirus rescue package that would include a second round of direct payments," Politico reported this morning, adding that a roughly $900 billion package could be announced as soon as today.

"We are close to an agreement … we are very close," Senator Schumer said on the floor this morning (Wednesday).

"We'll be on schedule to get the job done," Speaker Pelosi said last night, as reported by the New York Times, in a report that said "it remained unclear what congressional leaders would agree to for pandemic relief, as well as what additional legislative items may be merged with the broader spending package."

The Washington Post reported that the expectation that an emerging package could include additional "payments comes as congressional leaders opted to cut new aid for states and cities out of the bill, giving lawmakers more money to work with while keeping the total cost of the package under $1 trillion." Senator McConnell said last night, "I'm optimistic we're going to be able to complete an understanding sometime soon," the Post reported.

The scope of the overall deal appeared to remain under discussion, and it is unclear what the year-end bill could offer on taxes or other issues. It is also unclear how quickly an eventual deal could be processed, and an additional continuing resolution (CR) beyond December 18, to potentially allow time for consideration of the broader COVID/funding bill, is possible.

Tax

A Politico story this morning on the possibility, and difficulty, of President-elect Biden's Treasury Department unilaterally acting on tax issues via regulation, and possibly revising TCJA regulations, noted that the Trump administration provided an example for such scrutiny through an early executive order on tax regulatory burdens that resulted in Treasury identifying eight regulations they intended to withdraw, partially revoke or substantially revise, including IRC Section 385 documentation requirements. The report suggested that the relatively small number of regulations targeted in that process was reflective of a new administration wanting to act on its own priorities. "[T]he incoming administration will surely want to pursue its own agenda, and not just relitigate decisions made by its predecessor. Biden wants to do a big stimulus package next year, for example, which will likely mean new tax provisions that will prompt lots of new regulations for Treasury to devise," the report said.

On Friday, December 18, is the EY Webcast, "Tax in the time of COVID-19," at 12:00 p.m. ET. The coronavirus (COVID-19) and the resulting economic crisis — all occurring in an election year — have made reacting to tax and trade developments more complicated and more difficult. Panelists will provide updates on: (i) Elections, US economy and tax policy; (ii) What's happening at the IRS; and (iii) Breaking developments. Register.

———————————————