Koch brothers representatives have met with John Boehner’s staff in recent weeks. Kochs target Republicans on tax breaks

Powerful conservative groups including those backed by the Koch Brothers are pushing Republicans to take a hard line on a raft of expired tax breaks pending in the lame duck, an effort that could jeopardize party leaders’ hopes for a low-drama Congress.

Koch-backed Americans for Prosperity, Heritage Action for America and others want Republicans to capitalize on their election victory by killing some of the tax “extenders” they’ve long hated, such as a one subsidizing the wind energy industry.


Americans for Prosperity said it will spend $200,000 targeting 25 House Republicans on the wind issue. Among them: Reps. Gus Bilirakis (Fla.), Larry Bucshon (Ind.), Renee Ellmers (N.C.) and Michael Turner (Ohio).

Koch brothers representatives have met with House Speaker John Boehner’s staff in recent weeks to urge him to dump the provision.

Some House Republicans agree and are threatening to punt the entire extenders package into January, when they will formally take control of the Senate, rather than accept what they would consider to be a bad deal with Democrats.

“There is a chorus in the House who do not want to do anything in the lame duck, and that includes the extenders,” said a senior Republican aide.

That’s raising alarms among more moderate Republicans because it could disrupt the upcoming 2015 tax-filing season. Millions of Americans could suddenly find their tax refunds delayed or be forced to file twice — potentially leaving Republicans to blame.

That’s precisely the sort of thing Republican leaders have been hoping to avoid. After shouldering much of the blame for a string of unpopular battles over government debt and federal spending , they want to show voters ahead of the 2016 presidential election that they can govern.

Asked about the demands, a spokesman for Boehner (R-Ohio) said: “Those decisions will be made in the coming weeks, after leaders have a chance to talk to members, especially on the Ways and Means committee.”

At issue is the fate of a mishmash of more than 50 temporary provisions Congress has long rolled over one or two years at a time. Some benefit multinational corporations, giving them tax breaks on money held overseas. Others offer special write-offs for race horse owners, motorsport entertainment complexes and film productions that critics have long complained are little more than earmarks. Others benefit ordinary taxpayers such as a deduction for sales taxes and another offering a break to those who’ve had mortgage debt forgiven.

Senate Democrats want to revive the provisions with only minimal changes for two years and have passed a bill in committee to do that, while House Republicans want to permanently renew a few and leave the rest for dead.

Conservative interest groups are pushing against what they say is a plan by party leaders plan to clear the legislative decks during the lame duck session, so they can begin next year with a fresh slate, even if that means agreeing to Democrats’ demands.

“The idea of making a major policy decision when Democrats still control the Senate — I think some Republicans look at that and rightly say, ‘Why in the world would we give them such a huge say in this policy when they were just rebuked by the American people?” said Dan Holler, a spokesman for Heritage Action for America.

It was among dozens of groups that signed a letter last week demanding Republican leaders kill the wind production credit, a provision long opposed by conservatives. The wind credit has divided Republicans in the past with some from wind producing states actively backing it.

They call it a key part of the Obama administration’s environmental agenda, and an example of the government unfairly subsidizing one industry at the expense of its competitors — in this case, coal, natural gas and nuclear energy producers.

“Calls to ‘clear the decks’ for the new Congress are nonsensical,” the letter reads. “Why would the newly elected Senate and House members (from either party) want to reward Senator Harry Reid for his legacy of dysfunction by allowing him the opportunity to advance his pet priority — the wind PTC (production tax credit)— during a lame duck session?”

Waiting until next year might also make it easier for Republicans to make some of the extenders permanent, which would in turn grease the skids for a larger tax reform because it would mean lawmakers would not have to pay for those tax cuts.

But others point to IRS Commissioner John Koskinen’s increasingly adamant warnings about the consequences of failing to act now.

The agency will have to reprogram its computers in response to any changes, which means taxpayers may have to wait longer to receive their refunds. Millions file almost immediately after filing season begins — usually in mid- to late-January — in part because they need the money.

Last year, the agency processed 27 million returns in the first week of the filing season alone, issuing 19 million refunds worth an average $3,317.

Lawmakers’ delays could also force many to have to file twice. That’s because if they file before Congress settles the fate of the extenders, they would have to file amended returns to take advantage of breaks like the sales tax deduction later added back into law. Or they could end up having to pay more, if they initially claimed a break that Congress later dropped.

The possibility that Congress will not act until January is “keeping me up at night,” Koskinen told the American Institute of Certified Public Accountants last week.

“I will continue to urge members of Congress not to let this uncertainty drag on,” he said. “Our hope is that lawmakers will provide a clear policy direction on the extender legislation before the end of November.”

Some Republicans complain that even if they wait until next year, it won’t necessarily be any easier to revamp the provisions. They’ll still have, at most, 54 votes in the Senate, which means they’d still probably need Democratic support to make any changes.

“Bad idea,” said Ryan Ellis, tax policy director at Grover Norquist’s Americans for Tax Reform. “We don’t like Wind PTC, but we don’t want to blow up the process over it.”

A top Republican tax aide last week raised the prospect of a one-year extension as a way of appeasing House conservatives without interfering with the tax season.

“I’m not even sure the House, especially after the election, can do a two-year bill,” said George Callas, staff director of the Ways and Means revenue subcommittee.

“There are some who want to punt, especially the more conservative members,” he said. “That’s where this one-year idea came come.” It would allow Congress “to punt while also not screwing up filing season for middle-class families.”

He said he hoped lawmakers could reach a compromise during the lame duck that permanently renewed at least some of the provisions.

But it’s unclear whether Senate Democrats can stomach the cost, and a Reid spokesman rejected the idea of a one-year renewal. “No one here thinks that’s viable at this point,” said Adam Jentleson.

A senior Republican aide predicted lawmakers would do something by the end of this year, though he couldn’t predict what.

“Something is going to happen by the end of the year on the extenders — I just don’t know exactly what it’s going to be,” he said. “We’re working diligently to find a negotiated solution.”

Rachael Bade contributed reporting.