WASHINGTON -Internal Revenue Service Commissioner John Koskinen is urging Congress to decide soon whether or not it wants to extend tax provisions that expired at the end of 2013.
Several of expired provisions, known as tax extenders, relate to bonds, state and local governments and Puerto Rico. They include new annual volume for qualified zone academy bonds, empowerment zone tax incentives, the deduction for state and local sales taxes, a deduction for domestic production activities in Puerto Rico, and the temporary increase in the limit on cover over of rum excise taxes in Puerto Rico and the Virgin Islands.
In a letter sent Monday to Senate Finance Committee Chairman Ron Wyden, D-Ore., Koskinen said that "it would be detrimental to the entire 2015 tax filing season and to millions of taxpayers" if Congress does not give a clear policy direction on extenders before the end of November.
The uncertainty over the expired provisions "raises serious operational and compliance risks," Koskinen said.
If there is still uncertainty about the extenders in December or later, the IRS may be forced to delay the start of the 2015 filing season and the processing of millions of taxpayers' refunds. If Congress makes any policy changes to existing extenders or adds new ones, there could be longer delays because "the IRS would have to reprogram systems and make processing changes," he said.
And it would be even more problematic if Congress waits until 2015 and then makes tax-law changes that apply retroactively to 2014. This would likely lead to "service disruptions, millions of taxpayers needing to file amended returns, and substantially delayed refunds," Koskinen said.
The IRS commissioner told Wyden that he was also writing to the top Republican on the Finance Committee, Sen. Orrin Hatch of Utah, as well as House Ways and Means Committee Chairman Dave Camp, R-Mich., and ranking minority member Sander Levin, D-Mich.
In April, the Senate Finance Committee approved legislation called the "Expiring Provisions Improvement and Reform Efficiency Act," or EXPIRE Act, that would extend most of the expired provisions through 2015. However, the bill has not been passed by the full Senate.
"It has been over six months since the Finance Committee passed the EXPIRE Act with strong bipartisan support," Wyden said in a statement Tuesday, after he received Koskinen's letter. "As the 2015 filing season begins to loom large, it is more urgent than ever that Congress moves in a decisive and bipartisan way to renew expired tax provisions that will give taxpayers the certainty they need to plan their finances."
Wyden added that Congress should act quickly on extenders so that it can work on comprehensive tax reform.
The House has voted to make permanent a few extenders that are not related to bonds.
