Private Tax Collection: Will Congress Ever Learn?

The use of private collection agencies to collect delinquent taxes has been tried by the federal government several times. Up to this point, all of the attempts have been failures. So why does Senator Charles E. Schumer (D-NY) want to use them again? Could he be politically motivated?

Senator Schumer has had a provision inserted into the tax extenders bill that will require the IRS to contract with four private collection agencies to collect delinquent income taxes. Did I mention that two of those agencies are located in Senator Schumer’s congressional district?

As I mentioned, we’ve been down this path before. The first attempt to collect delinquent taxes by someone other than the IRS was in 1872 when Congress authorized contracts between private citizens and the U.S. Treasury Department to collect delinquent taxes. The collectors were entitled to retain 50% of the amount they collected. The process lost money and generated so many complaints that it resulted in the resignation of William Adams Richardson, Secretary of the Treasury.

Two other uses of private collection agencies were made in 1996 —1997 and 2006 — 2009. Both lost money and resulted in numerous consumer complaints. In one instance, private tax collection agencies collected approximately $98 million in delinquent taxes but it cost the Treasury over $110 million to administer the program. The Treasury Department also estimated that one of the programs would raise more than $1 billion in revenue, however the program ended up losing money.

Based on past experiences with private tax collectors you’d think that Congress would have learned its lesson. Private tax collection services don’t work. In addition to being money-losing operations there are other reasons not to hire private debt collectors.

Private debt collectors—

• have little incentive to keep taxpayer data confidential,
• are often heavy handed in dealing with taxpayers,
• are not inclined to offer payment options,
• usually cost more than the taxes they collect, and
• have no incentive to help the taxpayer correct simple errors.

My Solution

I have a better solution that doesn’t require the services of a private debt collector. Why not just collect the $3.3 billion in back taxes owed by current and retired employees of the federal government? (http://money.cnn.com/2014/05/23/pf/taxes/federal-workers-delinquent-taxes/) After all, the IRS knows where they work, so why not set up an affordable payment plan and deduct it from their paychecks each pay period?

What do you think?

AICPA Expresses Strong Concern over IRS Program

The Internal Revenue Service (IRS) just couldn’t wait for Congress to pass legislation giving them the authority to regulate unregistered paid tax return preparers.  So, on June 26, 2014 the IRS announced a “voluntary” Annual Filing Season Program (AFSP) outlining the new program that focuses on continuing education and filing season readiness for unregistered paid tax return preparers.

The AFSP program will allow unenrolled return preparers to obtain a record of completion when they voluntarily complete a required amount of continuing professional education, including courses in basic tax filing issues and updates, ethics, as well as other federal tax law matters.

According to IRS Commissioner John Koskinen, “This voluntary program will be a step to help protect taxpayers during the 2015 filing season.” However, not everyone agrees with the commissioner.  In fact, the AICPA calls the program unlawful and improper.

The following are excerpts from the AICPA’s letter to IRS Commissioner Koskinen explaining the basis for their concern:

I.                 The IRS must identify a statutory basis for any regulatory approach it creates.

·       No statutory authority, including 26 U.S.C. § 7803, authorizes the proposed program.

·       If the IRS cannot identify a clear, specific statutory basis for its action, then under the Administrative Procedures Act (APA) it may not act.

II.              A purportedly “voluntary” program would be an end-run around Loving vs. IRS.

·       The proposed program would also undermine the legal rationale given by the court in striking down the tax return preparer regulations.

·       The “voluntary” program would undermine the important concerns underlying Loving.

III.            The IRS must comply with procedural requirements.

·       The IRS must comply with the APA’s Notice and Comment procedures.

·       The IRS must comply with the Paperwork Reduction Act and with Executive Order 12,866 (Regulatory Planning and Review).

IV.             The proposal is arbitrary and capricious.

·       A voluntary program would not address the problem of unethical or fraudulent tax return preparers.

·       A voluntary program could give rise to confusion among consumers.

·       The IRS has not sufficiently considered alternative methods of ensuring that tax return preparers are qualified and competent.

For a complete copy of the AICPA’s 14 page letter go to the following website: http://www.aicpa.org/Advocacy/Tax/DownloadableDocuments/AICPA-Letter-to-Comm-Koskinen-June-24-2014.pdf .

I think the IRS is trying to do the right thing, but I believe that they are going about it in the wrong way. I agree with the AICPA that any approach the IRS takes must be supported by a strong legal basis and sound policy. To acquire that legal basis will require congressional intervention; however, Congress probably won’t act until after the next elections.

What do you think?

Regulating Tax Return Preparers

Do you realize that hairdressers are more heavily regulated than a mom and pop tax shop who offers to prepare your tax return? There is even reported to be a Laundromat in the Bronx offering tax prep services.

In most states, anyone can set up shop and offer tax preparation services without needing to demonstrate any level of competency.  Currently, only three states (California, Maryland, and Oregon) have laws addressing the necessary qualifications to prepare federal or state income tax returns.

Shouldn’t you look for a well-qualified individual to prepare your taxes? After all, you are legally responsible for the information in your tax return whether you pay someone else to prepare it or not.

The Internal Revenue Service tried to regulate unregistered tax preparers but has been temporarily stopped as the result of U.S. District Judge James E. Boasberg’s ruling in favor of three independent tax preparers. The judge found the IRS had exceeded its statutory authority in imposing requirements for mandatory testing and continuing education for tax return preparers. Congress is considering giving the IRS that authority.

Not everyone is waiting on the IRS.  The state of New York, Department of Taxation and Finance, proposed amendments to its Personal Income Tax Regulations and Procedural Regulations to regulate New York tax return preparers. The proposed rules would add requirements imposing minimum standards on who can become a tax return preparer, instituting a continuing education requirement, and requiring a competency exam, all similar to the IRS‘s Registered Tax Return Preparer  (RTRP) program.

To further muddy the water, the new Commissioner of the IRS, John Koskinen, has come out in favor of a volunteer tax preparer certification. This is basically the RTRP approach only on a volunteer basis rather than a mandatory requirement.

Three approaches to regulating tax preparers have been offered:

1.     Wait until Congress gives the IRS authority to regulate tax preparers.
2.     Implement tax preparer regulations by state governments.
3.     Adopt a volunteer certification program.

Only time will tell which of these options will win. Which one do you think should be used?

Three Strikes for the RTRP Regulations?

In baseball it is three strikes and you are out, but what about lawsuits? Three individuals sued the IRS to stop them from implementing their new regulatory scheme for registered tax return preparers (RTRP). Following is the course of events.

January 18, 2013 – As the result of the lawsuit, Federal District Judge James E. Boasberg issued an injunction preventing the IRS from enforcing its new Registered Tax Return Preparer regulations. (Strike 1) The IRS then filed a motion to stay the injunction.


February 1, 2013 – Judge Boasberg denied the IRS’s motion to stay. (Strike 2) The court also went on to clarify the requirements of the injunction and to emphasize that the PTIN (preparer tax identification number) program was specifically authorized by Congress and therefore not covered by the judge’s ruling.


March 27, 2013 – The District of Columbia Circuit Court of Appeals denied the IRS’s request to suspend the January 18th injunction. (Strike 3) A three judge panel upheld Judge Boasberg’s refusal to lift the injunction against the IRS. The court found that the IRS had not satisfied the strict requirements for a stay pending appeal.


The next major step will be a merits briefing which will conclude with oral arguments before a three-judge panel of the District of Columbia Circuit Court of Appeals.


Judge Boasberg did clarify that tax preparers could take competency tests and continuing education courses but only on a voluntary basis while his injunction remained in place.


Has the IRS struck out with its RTRP regulations? Probably not, but it may take an act of Congress to accomplish their goal of licensing all tax return preparers who are not EAs, CPAs, or Attorneys.


What do you think?



THE AMERICAN TAXPAYER RELIEF ACT OF 2012 --SO WHERE’S THE RELIEF?

On January 9, 1984 a Wendy’s TV commercial first aired touting their hamburgers as having more meat than similar competitor’s burger. Three elderly ladies stand at the pickup window of one of the competitors looking at a very large hamburger. The first lady keeps saying over and over “It certainly is a big bun.” They remove the top half of the bun to disclose a very small meat patty. Finally the shortest member of the group, a woman who could barely see over the counter, asks, “Where’s the beef?” I think we should ask Congress, “Where’s the relief?”

I don’t see how they can call a piece of legislation, “The American Tax Relief Act of 2012” (ATRA) when the Act did not extend the 2% payroll tax reduction allowing the rate to increase back to its previous level of 6.2% of wages. By not sustaining the reduced rate they have in fact increased the taxes of every working American by 2%.


Pork Provisions

It has been estimated that ATRA includes some $70 billion in “Pork Barrel” spending. Congress’s addiction to pork has given us both new and increased deductions that will add to the deficit instead of reducing it. Some of my favorites include:


• Increased rebate amounts to Puerto Rico and the Virgin Islands of a tax on rum imported into the US. Estimated costs $222 million.

• Quicker write off of improvements by motorsport race tracks (NASCAR). Estimate costs $78 million.

• Tax breaks for TV and movie producers that allow them to more quickly write off expenses. Estimated costs $248 million.

• Tax credits of up to $2,500 for purchasing electric powered motorcycles. Estimated costs $7 million.

Here are some of the more significant provisions included in the bill:

Alternative Minimum Tax

Probably one of the better things included in the legislation was to make permanent the Alternative Minimum Tax (AMT) threshold and indexing it to inflation. The new threshold amount is $78,750 and $50,600 for married and single respectively.

Capital Gains and Dividends

The current maximum tax rate of 15% on net capital gains was extended permanently at 15% except for individuals earning $450K for married filing jointly and $400K for aingle filers. For these individual the rate increases to 20%.

Estate, Gift and Generation-skipping Tax

The tax exemption for the estate, gift, and generation-skipping tax was permanently extended at $5 million per person and indexed to inflation; however, the top rate was increased to 40%.

Individual Income Tax Rates

Current individual income tax rates (10% - 35%) were permanently extended, except for those individuals making $400K or more and married joint filers making $450K or more. For these taxpayers the top tax rate is increased to 39.6% .

Personal Exemption and Itemized Deductions Limitations

The personal exemption phase-out and the itemized deductions phase-out were repealed by the Act except for taxpayers with adjusted gross income of $300K for married filing jointly, $275K for head of household, and $250K for single.

It appears that ATRA has at least put a Band Aid on the budget but has done nothing to address the long term issue of deficit spending. By trying to ignore the problem they have been successful in taking a set of complex rules and regulations (Internal Revenue Code) and made them almost incomprehensible.

What do you think?

A Tale of Two Plans

There are barely 10 days left in 2012, and we are still waiting for Congress and the White House to forge an agreement that would prevent more than $600 billion dollars in tax increases and spending cuts from going into effect on January 1, 2013.

The House Republicans were originally scheduled to bring their Plan B legislation to the floor of the House for a vote. The bill would have raised the marginal income tax rate on household income in excess of $1 million. The Democrats felt that the $1 million dollar threshold was too high. The bill was unlikely to pass in the Senate in its current state.

The Republican bill (Plan B) would have:

• Allowed the top marginal income tax rate, capital gains rate, and dividend rate to expire after 2012 for taxpayers earning over $1 million per year. The top tax rate on ordinary income would increase to 39.6% for these taxpayers, and the top rate on capital gains and qualified dividends would increase to twenty percent (20%).
• Permanently extended the Bush-era tax cuts for taxpayers with income below the $1 million threshold
• Kept the estate tax at its current level. The current estate tax structure has a 35% top rate and a $5 million exemption. The exemption is indexed for inflation.
• Permanently increased the exemption for the individual alternative minimum tax (AMT) and indexed the exemption for inflation. (It is about time that Congress ended the charade of patching the AMT exemption amounts every year or two.) This provision would have been effective for tax years after December 31, 2011; i.e., it would have been retroactive to the beginning of this year.
• Permanently increased the Section 179 expensing limitation to $250,000 and indexed the limitation for inflation after 2013. The limitation would, however, be reduced if the cost of Section 179 property placed into service during the year exceeded $800,000.

Plan B did not include the spending cuts that House Speaker Boehner had offered in his previous negotiations with the White House. In addition, the plan did not reinstate the personal exemption phase-out limitations or the limitations on itemized deductions.

The Republican plan was announced when House Speaker Boehner rejected an offer from the President that called for $1.2 trillion in new tax revenue. President Obama's offer included provisions that would have allowed most of the Bush-era tax cuts to expire for taxpayers who earned over $400,000. The President’s offer included about $1.2 trillion in spending cuts.

The White House's plan to avoid the fiscal cliff reportedly includes the following:

• Permanently extends the Bush-era tax rates for those taxpayers earning below $400,000
• Returns the estate tax to its 2009 structure when the top tax rate was 45% and there was a $3.5 million exemption per spouse.
• Raises the top capital gains rate and dividend rate to 20%
• Reinstates the personal exemption phase-out limitations and the limitations on itemized deductions for married taxpayers earning over $250,000 and single filers earning over $200,000.
• Permanently patches the individual AMT exemption amounts
• Imposes caps on itemized deductions and major exclusions for upper-income taxpayers effective in 2014.

Although Plan B probably would not have passed in the Senate, it did provide a possible starting point for negotiations between the House and Senate that might have resulted in a compromise that would be acceptable to both chambers.

President Obama pointed out this week that he has offered a balanced deficit-reduction plan with more than $1 trillion in spending cuts. He feels that the White House’s offer is close enough to the Republican plan that it should be possible for both sides to approve his plan by Christmas.

On Thursday, December 20, the Republicans cancelled the vote on their “Plan B” tax plan.  The House Speaker indicated that there were not enough votes to pass the Republican bill.  Apparently the bill narrowly cleared a procedural hurdle this afternoon and that made passage of the bill look unlikely. The House also recessed abruptly. 

Based upon reports earlier today, it seems unlikely that a deal will be reached before December 25. Even if an acceptable compromise is reached, any final vote would probably occur after Christmas.

While most of the attention regarding the fiscal cliff has focused on the negotiations between Congress and the White House, the IRS is strongly urging Congress to pass the alternative minimum tax patch quickly. The IRS Commissioner said that nearly 100 million taxpayers out of the 150 million taxpayers who are expected to file could be prevented from filing their taxes until March 2013 or thereafter. This number is an increase from the 60 million affected taxpayers that the Commissioner estimated in November.

Absent swift congressional action, the Commissioner said that nearly 30 million taxpayers will become subject to the AMT unless the AMT patch issue is resolved soon. The resulting situation could cause lengthy delays in tax refunds and unexpectedly higher tax liabilities for taxpayers who were previously unaware that they would be subject to the AMT. Congress probably does not need to be reminded that there is a large block of registered voters among those 30 million taxpayers.

While Congress and the White House search for the sanity clause, we can at least thank Santa for our presents next week. Perhaps some of our elected officials in Washington need to have some spectral visitors stop by during the holiday season, not unlike Ebenezer Scrooge.

Coal in the Stocking: Proposed Regulations for Two New Taxes

Coal in the Stocking: Proposed Regulations for Two New Taxes

After enjoying Thanksgiving and a bountiful feast with my family and friends, I wondered how Congress and the White House would approach the issue of the looming fiscal cliff. Thus far, they have lived up to my expectations. It will be interesting to see how their game plays out over the upcoming weeks.

Recently, we learned more about two new taxes related to the Health Care and Education Reconciliation Act (HCERA) and the Patient Protection and Affordable Care Act (PPACA). The Department of the Treasury and the IRS gave us an early holiday gift by releasing proposed regulations related to the Net Investment Income Tax and Additional Medicare Tax. Since many tax practitioners are busy in December with year-end tax planning, the release of the proposed regulations is timely. The comment period ends on March 5, 2013, for both sets of rules.

Net Investment Income Tax

The new Net Investment Income Tax (NIIT) goes into effect starting in 2013. The Health Care and Education Reconciliation Act of 2010 added new Section 1411 to the Internal Revenue Code (IRC) and is effective for taxable years beginning after December 31, 2012. The 3.8 percent NIIT applies to individuals, estates, and trusts that have certain investment income above certain statutory threshold amounts.

Individuals will owe the tax if they have net investment income and also have modified adjusted gross income over the following amounts:

Filing Status	Threshold Amount
Married filing jointly	$250,000
Married filing separately	$125,000
Single	$200,000
Head of household (with qualifying person)	$200,000
Qualifying widow(er) with dependent child	$250,000

Note: These thresholds are not indexed for inflation.

Here is a list of what is generally included in net investment income:

·         Interest

·         Dividends

·         Capital Gains

o   Capital gains from sales of stocks, bonds, and mutual funds

o   Capital gain distributions from mutual funds

o   Gain from the sale of investment real estate (including gain from sale of a second home that is not a primary residence)

·         Rental and royalty income

·         Non-qualified annuities

·         Income from businesses involved in the trading of financial instruments or commodities

·         Businesses that are passive activities to the taxpayer (within the meaning of IRC Sec. 469)

The tax does not apply to any amount of gain from the sale of a personal residence that is excluded from gross income for regular income tax purposes.

The IRS indicated that the tax will be reported on and paid with Forms 1040 and 1041.

Estates and trusts are subject to the tax if they have (1) undistributed net investment income and (2) adjusted gross income over the dollar amount at which the highest tax bracket for an estate or trust begins in the taxable year. For tax year 2012, this threshold is $11,650. There are special computations rules for certain unique types of trust. In addition, there are some trusts that are not subject to the Net Investment Income tax.

Taxpayers who anticipate that they will exceed the thresholds listed above might accelerate net investment income to 2012 or take some gains in 2012 rather than facing the Net Investment Income Tax of 3.8 percent and the possibility of additional taxes if certain Bush-era tax cuts are not extended through 2013.

Additional Medicare Tax

The IRS also released its proposed rules regarding the Additional Medicare Tax. The tax applies to an individual’s wages, Railroad Retirement Tax Act compensation, and self-employment income that exceeds a threshold amount based on the individual's filing status. The rate of Additional Medicare Tax is 0.9 percent.

An individual is liable for the Additional Medicare Tax if the individual's wages, compensation, or self-employment income (together with that of his or her spouse if filing a joint return) exceed the threshold amount for the individual's filing status:

Filing Status	Threshold Amount
Married filing jointly	$250,000
Married filing separately	$125,000
Single	$200,000
Head of household (with qualifying person)	$200,000
Qualifying widow(er) with dependent child	$250,000

Taxable wages not paid in cash, such as noncash fringe benefits, are subject to the Additional Medicare Tax, if, in combination with other wages, they exceed the individual's applicable threshold. Tips are subject to the tax also.

The imputed cost of group-term life insurance coverage in excess of $50,000 is subject to social security and Medicare taxes, and to the extent that, in combination with other wages, it exceeds $200,000, it is also subject to Additional Medicare Tax withholding.

An employer is responsible for withholding Additional Medicare Tax from the wages or compensation paid to an employee in excess of $200,000 per calendar year. This is done without regard to the individual's filing status or wages paid by another employer. An individual may owe more than the amount withheld by the employer, depending on the individual's filing status, wages, compensation, and self-employment income. If this is the case, the individual should make estimated tax payments and/or request additional tax withholding using Form W-4, Employee's Withholding Allowance Certificate.

Individuals who are liable for the Additional Medicare Tax will calculate the Additional Medicare Tax liability on their individual income tax returns (Form 1040). They will also report the Additional Medicare Tax withheld by their employers on their Form 1040.

Note: An individual might have two jobs where his or her wages are below the $200,000 threshold at each job. However, the sum of those wages may exceed the threshold at which Additional Medicare Tax is owed. If any employee anticipates such a situation, he or she can make estimated tax payments and/or request additional income tax withholding using Form W-4.

Employers will be relieved to learn that there is no employer match for the Additional Medicare Tax. However, an employer that does not meet its withholding, deposit, reporting, and payment responsibilities for the Additional Medicare Tax may be subject to all applicable penalties.

Note: Taxpayers can be subject to the Net Investment Income Tax and Additional Medicare Tax but not on the same type of income.

While most of the attention during the past two weeks has been focused on the end of the Bush-era tax cuts and the fiscal cliff, this week's release of proposed regulations for taxes relating to the health care laws reminds us that we already have some concrete tax increases in place for 2013.

The Fiscal Cliff: A Perfect Storm

What is the Fiscal Cliff and how might our country be affected? The Fiscal Cliff is a “perfect storm” of three components: revenue increases, spending cuts, and the spiraling debt incurred by our government—paired with Congress’s failure to act to right any of these issues. Unless Congress acts to by the end of 2012, we will go over the fiscal cliff, likely sending our country into a double-dip recession. Watch this brief video with Winford Paschall, CPA, and Robin Thompson to hear more...

Checkpoint Learning offers Fiscal Cliff CPE webinars in addition to hundreds of online and webinar tax and accounting courses; click here to check them out: http://cl.thomsonreuters.com/CourseFinder/Search?keyword=W198T,W197T

Road to Somewhere: Tax Changes in the Senate-Passed MAP-21 Transportation Bill

When I filled my gas tank the other day, regular was still below $4 per gallon. The difference between the price I paid and $4 seems to have diminished faster than I would have preferred. Anyone who has watched the price of gasoline increase over the past year can understand why the business standard mileage rate increased from 51 cents per mile for travel during the first half of 2011 to 55.5 cents per mile for travel in the second half of 2011. As of January 1, 2012, the standard mileage rate is 55.5 cents per mile. If the price of gas continues to increase, the standard mileage rate will probably increase again.

The federal excise tax on gasoline is currently 18.4 cents per gallon, and there are 15 days left before current transportation funding and the authority to collect the federal gas tax that supports that funding expires. Congress is now paying close attention to the March 31 deadline.

The Senate voted on March 14 to pass an 18-month transportation bill, known as S. 1813, the "Moving Ahead for Progress in the 21st Century Act" or MAP-21. (MAP-21 sounds more like a food additive, a genome, or a distant star than the name of a bill.) Although the legislation primarily overhauls a number of federal highway-related programs, the bill does contain some important tax changes.

Here are some of the tax changes contained in the Senate-passed transportation bill. This is not a complete list.

Parity for employer-provided mass transit and parking benefits. For 2011, there was parity for exclusion from income for employer-provided mass transit and parking benefits. The exclusion was $230 per month for each of these breaks. However under current law, for 2012, the exclusion is $240 for qualified parking (due to an inflation adjustment) but only $125 for employer-provided transit and van-pooling benefits. Under the bill, effective for months after December 31, 2011, the 2012 exclusion amount for employer-provided transit and van-pooling benefits would be increased from $125 to $240.

Funding break for employers maintaining pension plans. As a result of the current, low interest rate climate, pension plan contributions have been very high, and there is concern in Congress that this will lead to more company layoffs or pension plan freezes. Under the bill, plan liabilities would continue to be determined based upon corporate bond segment rates, which are based on the average interest rates over the preceding two years. However, for plan years beginning in calendar year 2012, for purposes of the minimum funding rules, the segment rates would be adjusted up or down, as necessary, to an amount equal to either 90% or 110% of the 25-year historic average of interest rates, whichever is closest. In today's low-rate environment, the immediate effect of this change would be to raise interest rates for funding purposes and thereby lower the minimum required pension contribution. For plan years beginning in calendar year 2013, the interest rate "corridor" would expand in 5% increments each year until it reaches 30% above and 30% below the 25-year historic average of interest rates.

AMT relief for private activity bonds. Tax-exempt interest on private activity bonds issued after the enactment date and before January 1, 2013, would not be an item of tax preference for purposes of the alternative minimum tax (AMT). Additionally, tax-exempt interest on private activity bonds issued after the enactment date and before January 1, 2013, would not be included in the corporate adjusted current earnings (ACE) adjustment.

Longer write-offs for leased highway property. States may contract with a private entity to lease an existing highway or build a new one, and then operate the highway for a number of years. Although these transactions generally are structured as a lease (plus grant of a franchise permitting the private entity to collect tolls), the private entity is treated as the owner because it has the burdens and benefits of ownership. Under provisions of the bill, for leases entered into after the enactment date, the highway property would have to be depreciated over 45 years (instead of 15), and the cost of granting the franchise to collect tolls would have to be amortized over a period that is not less than the term of the applicable lease (instead of 15 years under Code Sec. 197).

Revocation or denial of passport of individuals owing more than $50,000 in back taxes. Effective on January 1, 2013, the bill would authorize the government to deny the application for a new passport or renewal of an existing passport when the individual has more than $50,000 (indexed for inflation) of "seriously delinquent tax debt." A seriously delinquent tax debt does not include a debt that is being paid in a timely manner under an agreement with the IRS or if the collection of the debt is on hold because of a collection due process hearing. The government also could revoke a passport upon reentry into the U.S. for such individuals.

In addition, the provisions of this bill allow the IRS to impose a levy of up to 100% (up from the current law's 15%) against Medicare service providers with tax delinquencies.

The bill now goes to the House of Representatives. It remains to be seen if all of the tax provisions in the Senate bill will be present in the final legislation. While the transportation bill works its way through the House, do not be surprised if the price of regular gas soon exceeds $4 per gallon. Once that threshold is exceeded, Congress may have some political incentives to add other provisions to this bill.