In a letter dated Monday, October 6, Internal Revenue Service (IRS) Commissioner John Koskinen stressed the importance of passing a tax extenders bill by the end of November to ensure that the IRS is able to meet deadlines to prepare for the 2015 tax filing season. In the note addressed to Senate Finance Committee Chairman Ron Wyden (D-OR), ranking member Orrin Hatch (R-UT), House Ways and Means Committee Chairman Dave Camp (R-MI), and ranking member Sandy Levin (D-MI), Koskinen emphasized that without certainty about what will happen to these provisions that expired at the end of 2013, filing dates and refunds for tax season 2014 would have to be postponed. This notoriously happened in tax season 2012 after legislation to avert the “fiscal cliff” – a group of tax and spending policies that were set to expire on January 1, 2013 – was passed at the last minute.
Koskinen’s letter highlights the importance of not just acting early on tax extenders but also of how essential long-term tax reform is for both our citizens and our government. Without proper direction from Congress, the IRS – much less the average citizen or business – has little ability to plan ahead for what their tax bill will be. Moreover, the ability of any tax credits, deductions, or exclusions to incentivize behavior is nullified when taxpayers don’t even know if those preferences will exist when they next go to file.
The Senate Finance Committee passed tax extenders legislation in April 2014, while the House Ways and Means Committee under Chairman Camp’s leadership has pursued review and passage of certain extenders on a policy-by-policy basis. Leadership of both committees have also expressed a strong desire to address comprehensive tax reform.
Both the long-term fiscal health of our country and the short-term functioning of our government depend on clear tax policy emanating from Congress. Policymakers should take Commissioner Koskinen’s suggestion and pass a tax extenders bill as soon as possible. Then, they should go back to working on tax reform writ large to ensure that the country has sufficient revenue to pay its bills and that letters like this aren’t needed every year in the future.
Alex Gold served as a policy analyst for BPC’s Economic Policy Project.