The Trump Administration today released its fiscal year (FY) 2021 budget proposal, entitled “A Budget for America’s Future.” The budget contains the administration’s recommendations to Congress for spending and taxation for the fiscal year that begins on October 1, 2020.
Read the FY 2021 budget proposals including the Office of Management and Budget (OMB) Analytical Perspectives, as available on the White House website. It is possible that additional information on the administration’s proposals might be released in the future.
As in the case of most presidential budgets, the current proposals can be viewed as setting forth the administration’s priorities. To become law, legislation must pass both the House and the Senate, which may be expected to have different priorities.
The administration proposes $12 billion in base funding for the IRS “to modernize the taxpayer experience and ensure that the IRS can fulfill its core tax filing season responsibilities.”
The administration also proposes $353 million for enforcement in FY2021, with additional funding over 10 years for “new and continuing investments to expand and strengthen tax enforcement,” estimated to generate approximately $79 billion in additional revenue at a cost of $15 billion.
The budget’s long-run baseline assumptions assume permanent extension beyond 2025 of the individual and estate tax provisions of the 2017 tax law that is commonly called the “Tax Cuts and Jobs Act” (TCJA).
The budget also proposes revenue changes, including the following:
The budget assumes extension of the individual and estate tax cuts of the Tax Cuts and Jobs Act at a revenue cost of $1.4 trillion over 10 years—i.e., so-called “tax reform 2.0.”
In some recent fiscal years, the Treasury Department has released an explanation of the tax proposals in the budget (known as the “Green Book”) the same day as an administration transmitted its budget to Congress. The Treasury Department has not released a Green Book with respect to the Trump Administration’s FY 2021 budget proposals. Last year, the Trump Administration did not release a Green Book.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.