There weren’t a lot of surprises in the President’s Budget, set at $3.9 trillion for fiscal year 2015, which was released on March 4.
The "Green Book" (the Treasury’s General Explanations of the Administration’s Fiscal Year 2015 Revenue Proposals) was released the same day.
The proposals in the budget include provisions that would invest $12.5 billion in the Internal Revenue Service to improve service to taxpayers and reduce the deficit through more effective enforcement; expand and make permanent the Earned Income Tax Credit; enhance and permanently extend the R&D tax credit; create the MyRA to simplify retirement saving; impose the “Buffett Rule,” ensuring that millionaires pay at least 30 percent of their income in tax; and a number of new international tax proposals.
“Nothing is hugely surprising,” said Ed Karl, vice president of taxation at the AICPA. “There are a lot of similarities to last year’s budget, which is not surprising given the contentiousness of Washington and the difficulty of moving any tax legislation, especially in an election year.”
“The bottom line is that there’s a strong likelihood of not much moving forward,” he said.
“Something that did catch our eye is the proposed increase in the IRS budget,” Karl noted. “It’s not inappropriate, and it is something we have advocated, given slashes to the budget over the last several years. Our members’ ability to interface with the agency, with the people they need to work with, is becoming more difficult. We hope that the proposed increase in the budget will alleviate some of these problems, but it is a proposed budget. It will not be smooth sailing going through the appropriations process.”
Karl noted the provisions to combat identity theft. “ID theft has been very much on our minds, and there are provisions to combat it in the budget. That in itself is a real challenge from a budget perspective. The IRS is spending half a billion dollars in targeting ID theft, and we don’t know what kind of dent it is making,” Karl said.
There is also a provision to modify the due date of returns, he indicated. “We [the AICPA] had a large package that had been introduced. They picked up a key aspect of it, but not the entire package, which was to make the due date of the partnership return March 15 instead of April 15, and move the due date for corporate returns to April 15. The reason for this is that both individuals and corporations can be partners in partnerships, and you need the partners’ Schedule K-1 to complete their returns. With Form 1040 due on the same day as partnerships, it gives little time to do the return if you get the K-1 on April 15. Likewise, the corporate return is due on March 15, which gives little or no time if the K-1 is not available, so swapping due dates makes sense.”
Since the federal government’s fiscal year begins on October 1, it is customary to pass a budget by September 30 at the latest. However, that’s not what happened last year, Karl observed.
“We just went through a delayed process at the end of last year. The House and Senate budget committees meet separately early in the year, and they’ll hammer out a budget that has to be approved by both houses. We had two last year, but they were far apart and they could not agree on what was a sustainable budget, so we got to September 30 and the government shut down for two weeks.”
The Consolidated Appropriations Act of 2014, passed in January of this year, provides funding for the remainder of fiscal 2014, but funding for fiscal 2015—the subject of the latest budget proposal—will require the budget to go through the appropriations process, or, failing that, another continuing resolution will be necessary.
“They will need budget authority to move into the new fiscal year, either an approved and enacted budget or a continuing resolution,” Karl said.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access