Irony alert: IRS scandal puts tax reform on hold

Tough to enact tax reform when everybody's attacking the tax man, says Vanguard's Washington watcher.
MAY 30, 2013
Advisers can expect few changes in the tax law for the foreseeable future — thanks in part to the recent revelation that the Internal Revenue Service targeted conservative not-for-profit groups. While bitter feelings already exist across party lines, Ann L. Combs, principal and head of government relations at The Vanguard Group Inc., said she believes the scandal surrounding the IRS’ treatment of Tea Party affiliates will only serve to sharpen that divide. “The IRS situation that’s unfolding now will make tax reform harder,” she told an audience at InvestmentNews’ Retirement Income Summit in Chicago. “It’ll be hard to talk about tax reform, as everyone will be attacking the agency that administers the code.” Despite the impasse, Ms. Combs believes that some progress will be made in getting legislators to commit to the intention of tax reform. Actual changes, however, are some time off. As recently as earlier this month, there was some optimism that with Ways and Means chairman Dave Camp, R-Mich., and Senate Finance Committee chairman Max Baucus, D-Mont., would commit to a bipartisan overhaul of the tax code. But with apparently little action or effort to move forward, those hopes were already dimming before the scandal erupted. Now, all bets are off. “This controversy sucks a lot of oxygen out of the room and distracts from tax reform,” said Steve Rosenthal, a visiting fellow at the Tax Policy Center. “There is also the harm to a spirit of cooperation and collegiality: Tax reform can only happen in coordination with the legislative and executive branches, and Democrats and Republicans.

Latest News

LPL adds $600M UBS team in Tennessee
LPL adds $600M UBS team in Tennessee

The firm's latest additions, led by a second-generation financial advisor, are striking out via its Linsco employee advisor channel.

eMoney supports focused financial planning with enhanced needs analysis
eMoney supports focused financial planning with enhanced needs analysis

The Fidelity-owned fintech aims to help advisors connect with mass market and mass affluent prospects with single-goal conversations.

Trump SEC pick Paul Atkins grilled by Democrats in early political test
Trump SEC pick Paul Atkins grilled by Democrats in early political test

The prospective chair of the agency has pledged to shed conflicted interests and "return common sense to the SEC."

Finra moves to boot Alpine Securities, same firm that claims the regulator can’t
Finra moves to boot Alpine Securities, same firm that claims the regulator can’t

'If I were on the side of Alpine Securities, I’d put all my eggs in the federal court,' one attorney said.

CFP Board floats new procedural rules around bankruptcy, misdemeanors
CFP Board floats new procedural rules around bankruptcy, misdemeanors

If approved, the proposed revisions would achieve outcomes similar to the existing process while reducing the burden of oversight.

SPONSORED Retirement plan balances are flourishing. Why are so many advisors missing out on a $3 trillion opportunity?

Participants who receive professional 401(k) advice see higher returns on average, net, than those who don't.

SPONSORED Focus on clients, not compliance – why Gary Corderman found his fit with Farther

This wealth management platform finally delivers on the technology promises other firms couldn't - giving advisors a better way to scale and serve