House and Senate leaders have been doing a post-mortem on the tax extenders bill and trying to determine its impact and best next steps for tax reform and other extenders that were not included. This was and will be one of many issues discussed at early hearings on Senate Finance Committee and House Ways and Means Committee.

There are already indications in both the House and Senate that they will be taking very specific steps on tax reform this year. They are eager to take constructive steps to advance international tax reform this year and to establish a solid framework for changing the tax regime on passthroughs.

These efforts will likely pass under the next president, but they are being ironed out right now.

What is important to note is that this is the year of the hard work. NOT the hard decisions. Every tax provision in law, as well as new ideas are on the table.

The innovation box for international companies with Intellectual Property, new tax rules for passthroughs and fewer, but broader energy tax provisions in the form of credits and deductions that will reach for goals, rather than reward technology. Those are just a few of the provisions that will be debated.

This year the tax work gets done. Next year the political work gets done.

This year, we watch, listen, analyze and participate to develop new ideas. Unfortunately, those new ideas will have to be accompanied by new offsets:

• carried interest (it’s been saved for this)
• realignment of accounting rules (amortization Vs. Deductions)
• capping of deductibles, higher rates for dividends and cap gains
• etc.

Spending won’t be the only thing on the chopping block. Everybody’s pet tax provision is on the ledge. We need to monitor the direction of proposals and determine how they affect your companies.