The American Institute of CPAs (AICPA) has urged Congress for years to make permanent the temporary individual and business tax extenders, commonly referred to as the “tax extenders,” that lawmakers believe warrant permanence so that taxpayers have greater certainty. In a win for taxpayers and tax preparers, many tax extender provisions were made permanent as part of the Fiscal Year 2016 omnibus budget bill, H.R. 2029, to fund the federal government for Fiscal Year 2016, which Congress passed on December 18 and President Obama signed into law the same day.
The extender provisions that were not made permanent were either extended for five years through 2019 or for two years so that they are effective for 2015 and 2016. Passage of the legislation will make it easier for individuals and businesses to do effective tax planning. Details about the extender provisions are in the December 16 Journal of Accountancy story.
Other AICPA-backed provisions that were included in the bill were a provision giving the Internal Revenue Service (IRS) the authority to allow the use of truncated Social Security numbers on W-2 forms to help limit tax identity theft and a provision providing a safe harbor for de minimis corrections of information returns designed to reduce the number of corrected Forms 1099 received by taxpayers. The safe harbor is defined as less than $100 of income or $25 of tax withholding. The change could help reduce delays in preparing tax returns and reduce the number of amended returns filed with the IRS.
For more information about other tax provisions in the bill, read the December 18 Journal of Accountancy story.