Taxes and Tax Reform- Endless Summer

Presented by: Dean Zerbe alliantgroup Senior Managing Director Our Mission alliantgroup’s mission is one of education and awareness—we exist to help industry organizations, U.S. businesses and the CPA firms that advise them take full advantage of all federal and state tax credits, incentives and deductions available to them. Our government has legislated these powerful incentive programs to help businesses grow and successfully compete both in the U.S. and abroad. We are proud to have helped over 12,000 businesses claim more than $6 billion in tax incentives! alliantgroup’s headquarters is in Houston, Texas, with offices across the country including , , , Orange County, Sacramento, Orlando, and Washington, D.C. Our Mission

FEDERAL & STATE ENERGY R&D TAX CREDITS INCENTIVES

ALLIANTNATIONAL FEDERAL EXPORT (TAX CONTROVERSY INCENTIVES SERVICES) Our Team Former IRS Former Counsels Commissioners: to the Senate MARK W. EVERSON Finance STEVEN T. MILLER Committee: KATHY PETRONCHAK DEAN ZERBE

advantage DAWN LEVY

ARCHITECTS | ENGINEERS | CHEMISTS | BIOLOGISTS SOFTWARE DEVELOPERS | PhDs IN CREDITS & $6 BILLION INCENTIVES FOUND CREDIT & INCENTIVE OVER 20,000 STUDIES COMPLETED CPA FIRM OVER 3,500 PARTNERSHIPS OVER 100,000 JOBS CREATED Tax Politics 101:

• Elections matter --

• House Republicans: • - Origination • - Majority Rules • Senate Republicans (52 Votes) • - Bipartisan • - 60 Votes Rules (except reconciliation)

Tax Politics 101:

• Two – steps: • First -- Need Budget Reconciliation Instructions • Reconciled to a Number (10 year window – but doesn’t have to be 10, and can be per title) • $1.5 Trillion over ten • Second -- Tax-writing Committees • JCT role

2017

Can They Get It Done Before Santa? - Budget Resolution; Disaster; Appropriations; DACA; Debt Ceiling

- The Framework

Individual

Standard Deduction – Double 24k/12k (zip standard and personal exemptions ) Expanded Child Credit Seven brackets to three (well – four) 12/25/35 Individual

• AMT removed • Deductions – – State and Local and others – out – Mortgage and charity - In) – Or ceiling • Retirement (we heart retirement) • Death and GST – someday repeal • Other provisions – cross hairs • Dogs not barking – capital gains and dividends Business

• 25% rate for small and family-owned business • (anti-abuse) • Corporate 20% (15/20/28 . . . ) • Expensing – same as it ever was – five years (more love maybe for 179d) Interest expense – partially limited for C corporations – 40% (and others . . . ?) Business

• Other business deductions and incentives • 199 – OUT • R&D and LIHTC – IN • All others . . . . (esp. LIFO; Dividend Received Deductions . . . ) International

• Territorial System (roughly) • Deemed repatriation – over time • Illiquid assets subject to lower rate than cash/cash equivalent • Tax at a reduced rate and global basis foreign profits of US multinational corporations (income shifting) R&D Tax Credit

• Coons/Roberts bill – increased R&D credit for domestic manufacturing • And building on - • AMT turnoff • Startup • ASC on amended return Timing

• Hard push for this year • Next year (by July) • Effective dates Thank you! Dean Zerbe | 202.674.1960 | [email protected] www.alliantgroup.com