Tax reform—or, at least, significant tax legislation—is high on the legislative agenda in Washington. Although enactment of tax reform legislation in the near future would be difficult and by no means certain, lawmakers' interest in enacting tax reform soon may be higher now than any other time since the Tax Reform Act of 1986 became law more than three decades ago.
Excerpted from Understanding the Tax Reform Process: FAQs, released by KPMG LLP (KPMG) on July 21, 2017, the following outlines what businesses can do now to prepare for the possibility of tax reform.
Preparing for Tax Reform
Given the possibility that tax reform may move forward in the next couple of years, businesses may want to develop strategies for:
- Monitoring tax reform proposals and developments
- Assessing how proposals might affect them
- Incorporating the possibility of significant tax law changes into current planning
- Communicating with Congresss on significant issues.
For example, businesses may want do the following:
- Consider how tax reform proposals that are currently being considered might affect their particular facts and circumstances, as well as the potential impact on future plans
- Develop a high-level economic model of the possible effects of tax reform on the specific business, using reasonable assumptions or alternative scenarios in situations in which details are not clear
- Discuss the potential impact of tax reform with the "C suite," considering the potential impact on the business's tax burden as well as broader effects on a company;s products, business model, the competitive landscape, and the economy
- Develop strategey for monitoring ongoing legislative developments
- For areas of significant concern, identify potential allies (trade associations, industry groups, etc.)
- Consider advocacy priorities and reasonable legislative options, including possible carve-outs
- Develop appropriate transition rule proposals.
For more information, contact a professional with KPMG's Washington National Tax practice:
Understanding the Tax Reform Process: FAQs includes answers to 23 questions across the following topic areas:
- Prospects for tax reform
- Process and timing
- Key players
- The substance of tax reform
- Revenue considerations
- Winners and losers
- Effective dates and transitions rules
- Preparing for tax reform