John Bullis: Tax reform is needed, but don’t hold your breath | NevadaAppeal.com

John Bullis: Tax reform is needed, but don’t hold your breath

John R. Bullis

The 2014 budget proposal by the president is big and complicated. It has almost no chance of being enacted, but it does show how complicated our tax laws have become.

Here a just a few items that have not been covered completely in the news media:

Make the American opportunity tax credit permanent (college tax credit)

Expand the child and dependent-care tax credit (it is not indexed to inflation and should be changed to better reflect the real cost of caring)

Provide a new manufacturing-communities tax credit (limited to certain communities that have suffered economic distress)

Extend and modify certain energy incentives (current energy incentives are a joke)

Modify tax-exempt bonds for tribal governments

Reform and expand the low-income housing tax credit (mainly for wealthy investors)

Eliminate capital-gains taxation on investments in small-business stock

Provide a tax credit for medium and heavy-duty alternative-fuel commercial vehicles

Provide an exclusion from income for certain student-loan forgiveness

Provide for automatic enrollment in IRAs, including a small-employer tax credit

And relating to foreign income and taxpayers:

Determine the foreign tax credit on a pooling basis (sounds complicated)

Disallow the deduction for non-taxed reinsurance premiums paid to affiliates

Tax the gain from sale of a partnership interest on a “look-through” basis

And relating to tax administration matters:

Make e-filing mandatory for exempt organizations

Make repeated willful failure to file a tax return a felony

Require taxpayers who prepare their returns electronically but file their returns on paper to print a 2D bar code

Index all penalties to inflation

Impose a civil penalty on tax identity theft crimes

And other provisions:

Simplify the rules for claiming Earned Income Tax Credit for workers without qualifying children

Eliminate required minimum distribution rules for IRAs with balances of $ 75,000 or less

Allow all inherited retirement plan and IRA balances to be rolled over within 60 days

Many of the ideas or proposals in the president’s budget have been around and discussed for many years. Why doesn’t our Congress start working on getting those items taken care of (after careful consideration)?

Don’t worry or get excited about the president’s budget proposals. The chances are the Senate and the House will not quickly agree on any of the items.

John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.