The “Protecting Americans from Tax Hikes Act of 2015”

Overview of the Provisions

PERMANENT PROVISIONS

The bill makes over 20 tax relief provisions permanent, including provisions from 11 different bills marked up by the Ways and Means Committee in 2015.

Research and Development Credit (base credit, 14% ASC, AMT and Payroll provisions)
Section 179 expensing ($500,000 and $2 million limits, no limitation on real estate)
State and local sales tax deduction
15-year depreciation for leaseholds and improvements
International tax relief: Active finance exception
Deduction for teacher classroom expenses
100% exclusion on gains from sale of small business stock
Low-Income Housing Tax Credit extenders: the 9% floor and military housing allowance
Employer wage credit for employees on active duty (expanded for all employers)
All three charitable extenders: food inventory, conservation easements, and IRA charitable rollover, and exemption for certain payments to a controlling exempt organization
Both S corporation provisions: 5-year built in gains tax and charitable contributions
Mass transit parity
Deduction for teacher classroom expenses (indexed for inflation)
Enhancements since 2001: Earned Income Tax Credit, Additional Child Tax Credit, and American Opportunity Tax Credit
Two provisions for mutual funds: treatment of RIC dividends for foreign investors and subjecting RICs to FIRPTA

FIVE-YEAR PROVISIONS

Bonus depreciation (50% for 2015-17, 40% in 2018, 30% in 2019)
International tax relief: Controlled foreign corporation look-through rule
The New Markets Tax Credit
The Work Opportunity Tax Credit

TWO-YEAR PROVISIONS

Exclusion of discharged mortgage debt relief from gross income (modified)
Mortgage insurance premiums treated as qualified residence interest
Above the line deduction for qualified tuition and related expenses
Indian Employment Tax Credit
Railroad Track Maintenance Credit (modified)
Mine Rescue Team Training Credit
Qualified Zone Academy Bonds
Race horses: 3-year recovery period
Motorsports complexes; 7-year recovery period
Accelerated depreciation for business property on Indian reservations (modified)
Election to expense mine safety equipment
Film and television expensing (modified to include live theater)
Section 199 deduction for activities in Puerto Rico
Empowerment Zone tax incentives (modified)
Temporary increase in rum cover over
American Samoa economic development credit
Nonbusiness energy property credit
Alternative fuel vehicle refueling property credit
2-wheeled plug-in electric motor credit
Second generation biofuel producer credit
Biodiesel and renewable diesel incentives credit
Indian Coal Production Tax Credit (modified)
Credit for facilities producing energy from certain renewable resources
Credit for energy-efficient new homes
Special allowance for second generation biofuel plant property
Energy efficient commercial buildings deduction
Special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities
Credits relating to alternative fuels
Credit for new qualified fuel cell motor vehicles
Medical device tax moratorium

EXCISE TAXES

Medical device tax moratorium
Craft Beverage Modernization and Tax Reform Act

PROGRAM INTEGRITY

Modification of filing dates of returns and statements relating to employee wage information and nonemployee compensation to improve compliance
Safe harbor for de minimis errors on information returns and payee statements
Requirements for the issuance of ITINs.
Prevention of retroactive claims of earned income credit after issuance of social security number.
Prevention of retroactive claims of child tax credit. Sec. 206. Prevention of retroactive claims of American opportunity tax credit
Procedures to reduce improper claims. Sec. 208. Restrictions on taxpayers who improperly claimed credits in prior year
Treatment of credits for purposes of certain penalties.
Increase the penalty applicable to paid tax preparers who engage in willful or reckless conduct.
Employer identification number required for American opportunity tax credit.
Higher education information reporting only to include qualified tuition and related expenses actually paid.

MISCELLANEOUS PROVISIONS

Family Tax Relief

Exclusion for amounts received under the Work Colleges Program
Improvements to section 529 accounts
Elimination of residency requirement for qualified ABLE programs
Exclusion for wrongfully incarcerated individuals.
Clarification of special rule for certain governmental plans
Rollovers permitted from other retirement plans into simple retirement accounts
Technical amendment relating to rollover of certain airline payment amounts
Treatment of early retirement distributions for nuclear materials couriers, United States Capitol Police, Supreme Court Police, and diplomatic security special agents
Prevention of extension of tax collection period for members of the Armed Forces who are hospitalized as a result of combat zone injuries

Real Estate Investment Trusts

Restriction on tax-free spinoffs involving REITs
Reduction in percentage limitation on assets of REIT which may be taxable REIT subsidiaries
Prohibited transaction safe harbors
Repeal of preferential dividend rule for publicly offered REITs
Authority for alternative remedies to address certain REIT distribution failures Limitations on designation of dividends by REITs
Debt instruments of publicly offered REITs and mortgages treated as real estate assets
Asset and income test clarification regarding ancillary personal property
Hedging provisions.
Modification of REIT earnings and profits calculation to avoid duplicate taxation
Treatment of certain services provided by taxable REIT subsidiaries
Exception from FIRPTA for certain stock of REITs
Exception for interests held by foreign retirement or pension funds
Increase in rate of withholding of tax on dispositions of United States real property interests
Interests in RICs and REITs not excluded from definition of United States real property interests
Dividends derived from RICs and REITs ineligible for deduction for United States source portion of dividends from certain foreign corporations

Additional Provisions

Deductibility of charitable contributions to agricultural research organizations
Removal of bond requirements and extending filing periods for certain taxpayers with limited excise tax liability
Modifications to alternative tax for certain small insurance companies
Treatment of timber gains
Modification of definition of hard cider
Church plan clarification

Revenue Provisions

Updated ASHRAE standards for energy efficient commercial buildings deduction
Excise tax credit equivalency for liquified petroleum gas and liquified natural gas
Exclusion from gross income of certain clean coal power grants to non-corporate taxpayers
Clarification of valuation rule for early termination of certain charitable remainder unitrusts
Prevention of transfer of certain losses from tax indifferent parties
Treatment of certain persons as employers with respect to motion picture projects

TAX ADMINISTRATION

Internal Revenue Service Reforms

Duty to ensure that IRS employees are familiar with and act in ac- cord with certain taxpayer rights
IRS employees prohibited from using personal email accounts for official business
Release of information regarding the status of certain investigations
Administrative appeal relating to adverse determinations of tax-exempt status of certain organizations
Organizations required to notify Secretary of intent to operate under 501(c)(4)
Declaratory judgments for 501(c)(4) and other exempt organizations
Termination of employment of Internal Revenue Service employees for taking official actions for political purposes
Gift tax not to apply to contributions to certain exempt organizations
Extend Internal Revenue Service authority to require truncated Social Security numbers on Form W-2
Clarification of enrolled agent credentials
Partnership audit rules

United States Tax Court

Filing period for interest abatement cases
Small tax case election for interest abatement cases
Venue for appeal of spousal relief and collection cases
Suspension of running of period for filing petition of spousal relief and collection cases
Application of Federal rules of evidence
Judicial conduct and disability procedures
Administration, judicial conference, and fees
Clarification relating to United States Tax Court