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Less than a day after winning the post recently vacated by new House Speaker Paul Ryan (R-WI), new Ways and Means Committee Chairman Kevin Brady (R-TX) was called on by major industry groups to address tax extenders. This year, like last, these temporary tax provisions have been expired for almost a year, making it difficult not only to engage in forward-looking tax planning but also forcing individuals and businesses to game out their finances for the current year under a variety of different scenarios reflecting the possible actions (or lack thereof) that could take place before year-end. This article provides an overview of extenders and some background on Chairman Brady that may shed some light on how he will choose to address them.

Debate over extenders. In general, a main point of contention regarding extenders has been whether they should simply be re-extended on a cumulative basis to give taxpayers greater certainty, and then given a closer look on an individual basis as part of comprehensive tax reform-which has proven to be easier said than done-or whether each provision should be evaluated on its merits prior to any extension. One reason given for the most recent 1-year extension was to allow lawmakers the time to engage in more analysis to deal with the extenders in a more substantive way rather than another blanket extension. However, while most parties seem to agree that extenders should ideally be addressed as part of greater tax reform efforts, there seems to be little that is agreed upon beyond that.

Another issue with extenders is paying for them. Although there are a number of reasons that Congress may choose to enact provisions on a temporary basis-such as to provide temporary economic stimulus or test-drive a provision before making it permanent-in most cases, the main rationale is based on the way in which these provisions are taken into account for budgetary forecasting purposes. When a provision is temporary, regardless of whether it is routinely extended, its monetary impact is only reflected for the time it is scheduled to be in effect.

Political climate. The recent ascension of Paul Ryan to House Speaker will certainly have some effect on tax reform-although whether it improves or weakens the odds is debatable. He is known as a major advocate for tax reform in contrast to his predecessor John Boehner (R-OH), who famously reacted to a comprehensive tax plan submitted by Rep. Dave Camp (R-MI) by saying "blah, blah, blah." So, while tax reform may be a major item on Speaker Ryan's agenda, assuming such a major leadership role will likely take at least some of his attention away from the actual mechanics of it. Also, while there appears to be general support in favor of tax reform on both sides of the aisle, politics are likely to dictate that major reforms will wait until after next year's election.

Chairman Brady seems eager to continue where Paul Ryan left off, stating that he was "honor[ed] to lead this talented committee as House Republicans continue to advance Speaker Paul Ryan's pro-growth agenda" and "ready to hit the ground running." On his website, Chairman Brady has a section devoted to tax reform, decrying the current system as "too costly, complex, and unfair," and "full of loopholes and deductions that benefit special interests." His vision for a pro-growth tax Code is one that is "simpler, fairer, flatter"; "closes loopholes & limits deductions"; and "stops forcing companies to shift jobs overseas."

He has already indicated that making "key" extenders permanent is a priority for the Committee. With respect to the extender provisions below, Chairman Brady lists among his tax achievements fighting to restore the state and local sales tax deduction, which was repealed in '86 and which he states is "unfair to taxpayers in states that do not have a state income tax." He has submitted a bill to make that deduction permanent. In addition, he also authored a bill that would permanently extend and modify the research and development credit.

Earlier actions on extenders. In addition to the specific Brady initiatives mentioned above, there have been a number of actions taken this year to address extenders, although thus far none have seriously advanced.

Back in September, the Ways and Means Committee approved bills that would permanently extend: the above-the-line deduction for certain expenses of elementary and secondary school teachers, and further index the $250 amount for inflation (H.R. 2940); the 15-year recovery period for qualified leasehold improvement, restaurant, and retail improvement property (H.R. 765); bonus depreciation (with certain modifications) (H.R. 2510); the subpart F exemption for active financing income (H.R. 961); and the look-through treatment of payments between related controlled foreign corporations (H.R. 1430).

Expired provisions. Following are the provisions at issue, expired as of Dec. 31, 2014, arranged by subject matter. Note that TIPA also extended a number of provisions that aren't typically categorized as extenders (e.g., empowerment zone designations, qualified zone academy bond limitation), which are generally beyond the scope of this article but could potentially be dealt with similarly going forward.

Expired individual provisions include:

        . . . deduction for state and local sales taxes;

        . . . $250 above-the-line deduction for certain expenses of teachers;

        . . . above-the-line deduction for qualified tuition and related expenses;

        . . . deduction for mortgage insurance premiums treated as qualified interest;

        . . . parity for exclusion for employer-provided mass transit and parking benefits; and

        . . . exclusion of up to $2 million ($1 million if married filing separately) of discharged principal residence indebtedness from gross income;.

        . . . credit for certain health insurance costs.

Expired business provisions include:

        . . . research and experimentation credit;

        . . . work opportunity tax credit;

        . . . increase in expensing to $500,000 and in investment based phaseout amount to $2 million and expanded definition of Section 179 property;

        . . . 50% bonus depreciation;

        . . . exceptions under Subpart F for active financing income;

        . . . look-through treatment of payments between controlled foreign corporations;

        . . . special treatment of certain dividends of regulated investment companies (RICs);

        . . . employer wage credit for activated military reservists;

        . . . special expensing rules for film and television production;

        . . . special 100% gain exclusion for qualified small business stock;

        . . . reduction in S corporation recognition period for built-in gains tax;

        . . . election to accelerate alternative minimum tax (AMT) credits in lieu of additional first-year depreciation;

        . . . low-income housing 9% credit rate freeze (extended for allocations made before Jan. 1, 2016);

        . . . treatment of military basic housing allowances under low-income housing credit;

        . . . 15-year straight line cost recovery for qualified leasehold property, qualified restaurant property, and qualified retail improvements;

        . . . 7-year writeoff for motorsport racing track facilities;

        . . . deduction allowable with respect to income attributable to domestic production activities in Puerto Rico;

        . . . modification of tax treatment of certain payments to controlling exempt organizations;

        . . . accelerated depreciation for business property on Indian reservations; and

        . . . Indian employment credit.

Expired charitable provisions include:

        . . . enhanced charitable deduction for contributions of food inventory;

        . . . tax-free distributions for charitable purposes from individual retirement accounts (IRAs) of taxpayers age 701/2 or older;

        . . . basis adjustment to stock of S corporations making charitable contributions of property; and

        . . . special rules for contributions of capital gain real property for conservation purposes.

Expired energy provisions include:

        . . . credit for construction of energy efficient new homes;

        . . . energy efficient commercial building deduction;

        . . . construction date for eligible facilities to claim the production tax credit or wind credit;

        . . . credit for nonbusiness energy property;

        . . . alternative fuel vehicle refueling property;

        . . . incentives for alternative fuel and alternative fuel mixtures;

        . . . incentives for biodiesel and renewable diesel;

        . . . second generation biofuel producer credit; and

        . . . production credit for Indian coal facilities.