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| | LEGISLATIVE & TAX ADMINISTRATION NEWS |
The Sharks Are Circling
Opponents of extending the expired tax provisions are increasingly optimistic this will be the year Congress finally ends its bad habit of retroactively renewing these provisions, such as biodiesel tax credits. Many of the so-called “extenders” have languished for over two years without congressional action, the longest in the history of these provisions. Despite strong opposition across the political spectrum, some key tax writers, such as Senate Finance Committee Chairman Chuck Grassley, are strong supporters of certain provisions. Senators Grassley and Wyden released three committee summary reports on long-term solutions to expiring provisions earlier this week. Three more reports are outstanding but will be released once finalized.
IRS Updates FAQs for New Tax Transcript Policy
NAEA worked closely over the past year with IRS in developing the new tax transcript delivery rules. (The original changes were announced in August 2018.) The new FAQs page represents the most detailed, public explanation of the new process for obtaining masked and unmasked transcripts through the TDS and how long transcripts can be held in a practitioner’s SOR. This new electronic delivery system is “one of the biggest wins for NAEA that more people need to know about,” said Roger Nemeth, EA, NTPI Fellow®, and e-Services expert.
Does OPR Need Lawyers?
The American Bar Association’s Section on Taxation recently weighed in on IRS plans to phase out lawyers from the Office of Professional Responsibility and replace them with revenue agents and officers. An April 1, 2019, a Tax Notes Today article reported the IRS felt lawyers were not necessary to “interpret and apply the Circular 230 rules governing practice before the IRS.” The ABA Tax Section argues “If OPR were not independent, IRS agents could easily create conflicts of interest between taxpayers and their representative of choice by initiating a disciplinary action against practitioners who advocate zealously for their clients.” NAEA has requested a meeting with the acting director of OPR, Elizabeth Kastenberg, to discuss this issue.
Wave for Waivers
The IRS has automatically waived the estimated tax penalty for more than 400,000 taxpayers who were eligible for the waiver in 2018 but who did not claim it. IRS eased the safe harbor to 80 percent of a taxpayer’s estimated liability (down from 90 percent) earlier this year to assist taxpayers whose withholding or estimated tax payments were less than their tax liability (due to withholding table changes). As NAEA’s Jeff Trinca was quoted in today’s Tax Notes (subscription required) “until the withholding regime is settled, and employers and employees have had some time to digest, waiving penalties for underwithholding is a necessity.”
Renewal Time for ITINs
Over 2 million ITINs (individual taxpayer identification numbers) will expire at the end of the year. More specifically, expiring ITINs either have:
- Not used on a federal tax return at least once in the last three consecutive years, or
- Middle digits 83, 84, 85, 86, or 87 (and not already renewed).
Please remind ITIN users to renew now to avoid any disruption with their refunds next year.
Moving On Up
John Moriarty (not to be confused with this Moriarty) has been selected as the new IRS associate chief counsel for Income Tax and Accounting. He has served in the IRS Chief Counsel’s office for 29 years.
Taxing the Cloud
IRS has issued proposed regulations on the tax implications of international cloud and digital content transactions. The proposed regulations would classify a “cloud transaction” as either a lease of property or provision of services.
Monthly Rates
Notice 2019-48 provides the corporate bond monthly yield curve and others for July 2019.
Constructive Receipt
Rev. Rul. 2019-19 states failure to cash a distribution check from a qualified retirement does not relieve taxpayers of their obligation to include that amount in taxable income and does not relieve employers from the requisite reporting or withholding responsibilities.
Connecticut
Tax practitioners in the Nutmeg State are cautioning clients that the IRS may still issue guidance to shut down the SALT cap workaround with regards to passthrough entities.
Iowa
The Iowa Department of Revenue has finalized rules implementing the temporary nonconformity of Iowa’s tax laws to the federal repeal of gain or loss deferral from exchanges of like-kind personal property in tax year 2018.
Massachusetts
An August 8 Technical Information Release explains the implications of two recent state bills on “deemed repatriation income,” as amended by the TCJA.
Minnesota
Department of Revenue reminds taxpayers who are in the midst of back to school shopping to save those receipts for claiming the K-12 Education Credit or Subtraction on their taxes in 2019.
| | EVERYTHING BUT THE KITCHEN SINK |
Making Taxes Fun. Presidential candidate Andrew Yang supports making “Revenue Day” (April 15th) a national holiday to celebrate “our national community.” Don’t know how many enrolled agents would be able to join in the fun, unfortunately.
Looking Ahead to 2020. The Accounting Today article about some common tax issues to anticipate for next year is good enough to share again (it was also included in this week’s NAEA Tax Break.)
Well…yeah. A new study quantifies the amount of corporate tax revenue lost during the audit process for every dollar of IRS budget cuts and it’s in the billions.
Perhaps Chrisley Doesn’t Know Best. The reality TV star, Todd Chrisley and his wife, Julie, have pleaded not guilty to tax evasion charges.
“Like a welcome summer rain, humor may suddenly cleanse and cool the earth, the air and you.”
– Langston Hughes
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NAEA E@lert | Volume 1: Issue 37
Connect with NAEA
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Colby Horton, MultiView, Executive Vice-President, Publishing/Marketing, 469-420-2601 | Media Kit
Bethanney Standerfer, Content Editor, 469-420-2688 | Contribute news
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