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December 20, 2015


Tax extender legislation 2016: an update

One reason why tax compliance so challenging is that the federal tax code is always a moving target. The challenge isn’t only that the code is so complicated. It is that every year there is uncertainty about what Congress will include in it.

One aspect of this is a set of laws known as “tax extenders.” These are provisions involving various tax breaks that are generally set to expire by a certain date, unless Congress takes action to extend them.

In this post, we will update you on the current status of these extenders.

Congress took action a few days ago to continue many tax breaks that technically expired at the end of last year. There were 52 such breaks included in the legislation.

This outcome was remarkably similar to what happened last year with extenders. In mid-December of 2014, Congress took action to extend various expired or expiring tax breaks through the end of the year. The legislation was made retroactive to the beginning of the year.

This year, however, Congress didn’t merely pass a one-year extension for various tax provisions. Congress also expanded many tax breaks.

For example, the tax credit for research and development (R & D) is now permanent. Congress also tweaked the tax provisions on charitable giving.

There are also many very specific provisions that affect particular industries, such as excise taxes affecting the production of rum in Puerto Rico and the Virgin Islands.

In short, this year, as seemingly always, tax extenders kept the tax code a moving target.

Tax Controversy