The House Committee on Ways and Means has been working on tax reform and held 30 Congressional hearings during the 112th Congress, formed 11 bipartisan Tax Reform Working Groups, conducted a nationwide tax tour, released two options for Small Business Tax Reform and three separate discussion drafts. On February 26, 2014, the House Committee Chairman Rep. Dave Camp [R-MI] released a draft of legislation of the Tax Reform Act of 2014.
Earlier this year we shared news of H.R. 2041, S. 742, and President Obama’s Budget Proposal Eliminating the ESOP Dividend Deduction. We also provided a March 2013 ESOP and Corporate Tax Reform Update. Here is an update on ESOP legislation:
H.R. 2041: To modify the definition of fiduciary under the Employee Retirement Income Security Act of 1974 to exclude appraisers of employee stock ownership plans was introduced on May 17, 2013 by Rep. Brett Guthrie [R-KY2] and is currently co-sponsored by Jenkins, Lynn [R-KS2] and Loebsack, David [D-IA2]. It has been referred to the House Committee on Education and the Workforce.
Earlier this week we discussed how President Obama's 2014 Budget Eliminates ESOP 404(k) Dividends and the related comments from the ESOP Association. I wanted to share the General Explanations of the Administration’s Fiscal Year 2014 Revenue Proposals (Greenbook) as it relates to President Obama's 2014 Budget Proposal to Eliminate the ESOP 404(k) Dividend Deduction:
S. 742: The Promotion and Expansion of Private Employee Ownership Act of 2013 was introduced on April 16, 2013, by Sen. Benjamin Cardin [D-MD],and is currently co-sponsored by Blunt, Roy [R-MO], Klobuchar, Amy [D-MN], Landrieu, Mary [D-LA], Roberts, Pat [R-KS], Stabenow, Debbie [D-MI], and Thune, John [R-SD]. It has been referred to the Senate Finance committee.
Earlier today we discussed how President Obama's 2014 Budget Proposal Eliminates ESOP 404(k) Dividends for large C Corporations. The ESOP Association Blog provides some further commentary on the proposed elimination of IRC Section 404(k) ESOP Deductible Dividends in President Obama's Budget for Fiscal Year 2014:
An AICPA press briefing suggests that tax reform prospects are good, though probably not until next year. Two veterans of the 1986 reform process compare the current environment to the environment in 1986:
Historically the financial reporting requirements for ESOP companies have been have been limited to the requirements of Statement of Position 93-6 Employers’ Accounting for Employee Stock Ownership Plans (SOP 93-6). While the Financial Accounting Standards Board (FASB) explored additional reporting requirements in recent years those requirements have been shelved. That could soon change...