There are more than 60 tax provisions that expired at the end of 2011, according to the Joint Committee on Taxation.

In terms of interest, they run the gamut from a temporary increase in the limit on "cover over" of rum excise tax revenues to Puerto Rico and the Virgin Islands, to the increased Alternative Minimum Tax exemption amount, the research and development credit, and a wide variety of others on the list of extender items.

The failure of the Supercommittee (or Joint Select Committee on Deficit Reduction, to be precise) to reach any kind of agreement on deficit reduction and taxes may be reflective of the partisan way its members were selected. At the same time, it may portend an ongoing failure to act on any kind of tax legislation during the year ahead. Hence, for expiring provisions that didn't get extended before the end of the year, it may be a long time before Congress reconsiders them.

"The hope was that the Supercommittee would reach a deal on the big picture items, such as an agreement to reduce the deficit, with fundamental tax reform as part of it," said Marc Gerson, former Majority Tax Counsel to the House Ways and Means Committee and tax partner in the Washington office of law firm Miller & Chevalier. "Now the attention will be turned to a number of items that are high priority for both the administration and Congress."

"The biggest thing on the administration agenda is the jobs bill," said Edward Karl, vice president for taxation at the American Institute of CPAs. "In terms of the AMT patch, we're good through 2011, but it and a whole host of issues will come up in 2012. These include the student loan interest deduction, state and local tax deduction, and the deduction for school teacher expenses. And the whole estate tax discussion will be up for consideration at the end of 2012."

POST-ELECTION PROGRESS

Karl predicted that the more contentious and bigger issue items like the AMT patch and the extenders are likely to be dealt with after the election.

"It's very important to have certainty in taxes," agreed Dean Zerbe, former senior counsel and tax counsel to the Senate Finance Committee and managing director of alliantgroup. "I don't think we'll see extenders or the AMT patch until later in the year. In fact, we could wait for everything, including extenders, AMT and the Bush tax cuts, until after the elections."

"There's not much incentive to deal with capital gains, other than carried interest, which will be very watered down," he said. "For the AMT, they'll just kick the can down the road for another year or two. The R&D credit is like the swallows coming back to Capistrano - it will be re-instated, but not until later and it will have to be done retroactively. There could be a jobs bill before the election and there might be a small energy bill to provide a vehicle for some of the other provisions. Clients are getting used to accelerated depreciation and are beginning to anticipate it. Other than that, I don't see much of anything happening until after the elections."

• 1
• |
• 2
• |
• next