House GOP adds tax bills to September agenda — Letter calls for Death Tax Repeal Act vote — Report to criticize watchdog’s IRS tea party probe Presented by the Land Trust Alliance

By Mackenzie Weinger

With assists from Kelsey Snell, Erin Mershon and Brian Faler


HOUSE GOP ADDS TAX BILLS TO SEPTEMBER AGENDA. House Republicans plan to take up a number of tax proposals this month as part of an effort to highlight their party’s priorities ahead of the fall elections. In a memo outlining their party’s September agenda, Majority Leader Kevin McCarthy said the chamber will take up an omnibus jobs package combining some 14 different bills. Among them: legislation to permanently extend bonus depreciation, Section 179 expensing and the research and development credit.

The chamber will also take up bills tied to the IRS tea party scandal that would bar agency employees from using personal email accounts to conduct official business and codify the right to appeal IRS decisions regarding tax-exempt status. None of those proposals are likely to go anywhere in the Senate. McCarthy said lawmakers will also approve a continuing resolution funding the government into the next fiscal year, which begins Oct. 1. Republicans have not yet decided how long the funding legislation would extend.

And ITFA makes the cut for McCarthy’s jobs package. McCarthy is gearing up for the House to pass two omnibus bills in the September work session that kicks off next week — and the Permanent Internet Tax Freedom Act is among the legislation that he plans to include in one of those packages. ITFA, which would make permanent a moratorium on taxing Internet access, passed the House earlier this year but has stalled in the Senate.

Some lawmakers, including Senate Majority Leader Harry Reid, would like to attach the ITFA to another bill — the Senate-passed Marketplace Fairness Act — that allows states to tax online commerce. It looks like the Senate will instead pass a short-term bill, to give pro-online sales tax folks time to find support for a single bill that establishes a permanent moratorium and also advances the MFA. Reid said earlier this summer that he'd bring up that short-term measure as soon as the Senate returned from recess. In the meantime, POLITICO's Jake Sherman has the full story on the memo, here: http://politi.co/1qrBllX

HAPPY FRIDAY! And thanks for reading Morning Tax this week. If you want to talk taxes, you can find me at [email protected] or on Twitter at @mweinger. As always, please follow @ POLITICOPro and @ Morning_Tax.

HOUSE & SENATE: Out.

MARK YOUR CALENDAR: WAYS & MEANS OBAMACARE HEARING. The Ways and Means Subcommittee on Health will hold a hearing on the status of Obamacare implementation. IRS Commissioner John Koskinen and Andy Slavitt, deputy principal administrator of the Centers for Medicare & Medicaid Services, are set to testify. It’ll all go down at 10 a.m. Wednesday, Sept. 10, in 1100 Longworth. More on the hearing here: http://1.usa.gov/1wb0rq2

LETTER CALLS FOR DEATH TAX REPEAL ACT VOTE. Thirty members sent House leadership a letter today calling for a vote on the Death Tax Repeal Act “at the earliest possible opportunity.” The letter notes that the last time the House voted for repeal was in 2005, when it passed 242-162. The “236 members who have been elected in the intervening period had not yet had an opportunity to vote to repeal this onerous, destructive tax, the repeal of which has bipartisan support,” the letter states. “We believe that it is time to bring this measure to a vote on the floor and address an issue that resonates across the nation.”

REPORT TO CRITICIZE WATCHDOG’S IRS TEA PARTY PROBE. Our Rachael Bade has the story: “A Senate panel as early as Friday is expected to issue a report criticizing the inspector general of the IRS over its investigation last year into whether the agency targeted tea party groups for extra scrutiny, the results of which set off a political firestorm and led to a series of ongoing congressional inquiries. The report authored by Sen. Carl Levin (D-Mich.), who heads the Permanent Subcommittee on Investigations, is sure to further escalate partisan tensions over whether the IRS, under former agency official Lois Lerner, unfairly treated conservative groups seeking a tax exemption from the agency.” Pros: http://politico.pro/1rax4Ql

FULL APPEALS COURT TO REHEAR OBAMACARE CASE. Pro Health’s Joanne Kenen reports: “A lawsuit that challenges the core Obamacare health insurance subsidies will get another appeals court hearing in December. The full U.S. Appeals Court for the District of Columbia announced Thursday it will rehear the case, Halbig v. Burwell, on Dec. 17.” http://politico.pro/1o1NLfY

REPORT: IRS BEHIND ON PROCESSING COMPLAINTS. The IRS has been doing a poor job of processing complaints taxpayers have made against tax preparers, according to an IRS watchdog report released Thursday. The Treasury Inspector General for Tax Administration report found that almost half of the complaints filed hadn’t yet been reviewed by the tax agency. TIGTA listed a number of issues with the IRS’s tax return complaint process, zeroing in on problems with the agency’s timeliness and accuracy in dealing with the complaints lodged.

The watchdog reviewed 8,354 complaints against tax preparers reported to the IRS between October 2012 and September 2013 and found that 83 percent had no work done on them or were still being processed. The report also found that 3,953 of the complaints — or 47 percent — had not had any work initiated whatsoever and no case processor reviewing the complaint. Of those, 1,920, or 49 percent, had been in the IRS’s inventory for at least 60 days without any work being started, the report stated. Read the full report and recommendations here: http://1.usa.gov/1nyKUv3

CHAMBER LAUNCHES NEW TAX REFORM CAMPAIGN. The U.S. Chamber of Commerce announced Thursday that the business lobbying group is re-upping its push for comprehensive tax reform with a new ad campaign. The renewed push, which the group says has a multimillion-dollar budget, is centered on a petition posted at fairreform.com. The site urges people to sign up in support of a fairer, simpler tax code but does not offer any details of a plan or any legislative options.

HELP WANTED. We don't usually do job openings in Morning Tax, but this one we couldn't resist. I'm heading out for a new opportunity in a few weeks, and POLITICO needs a solid tax reporter to take over the helm while also covering the IRS and its efforts to police corporate tax avoidance, Obamacare and more. It's a great gig, so if you're interested please email [email protected].

QUICK LINKS:

— Ajay Gupta in Tax Analysts: “News Analysis: Grossing Up an Inversion Tax.” http://bit.ly/1nyUFsY

— AP: “Indiana blocks $78 million in wrongful tax refunds.” http://indy.st/WgP8Q1

— Bloomberg Businessweek: “Letting Undocumented Immigrants Work Could Be Worth Billions to the IRS.” http://buswk.co/1qhzK2t

—Reuters: “No more secrets — Swiss banks learn to shape up, not shut up.” http://reut.rs/1o1l8zv

—The Washington Post’s Catherine Rampell: “Upset about Burger King’s tax inversion? Blame Congress.” http://wapo.st/1Cw79ew

—The New York Times’ Room for Debate: “Should Pro-Sport Leagues Get Tax Breaks?” http://nyti.ms/1rbkvnS

—Reuters: “Tesla picks Nevada for $5 billion battery plant.” http://reut.rs/1xiqXSB

—PwC: “The interaction of U.S. FATCA and U.K. CDOT poses unique challenges.” http://pwc.to/1t5alrc

—WSJ: “Emails Raise New Questions About IRS Targeting.” http://on.wsj.com/1oKDfsQ

— Howard Gleckman: “Is It Time to Repeal the Corporate Income Tax?” http://tpc.io/1qrHTRL

DID YOU KNOW? In an average day, Chipotle uses 97,000 pounds of avocados.

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