This message was sent to ##Email##
|| YOUR MEMBERSHIP INFORMATION|
Full Name: ##firstname## ##lastname##
NAEA ID: ##userid##
Membership Exp. Date: ##membertype##
| || LEGISLATIVE & TAX ADMINISTRATION NEWS|
The House Ways and Means Committee Floats Secret “Extenders-Plus” Package
You heard it here first—because what other association government relations (GR) team has this inside track?
NAEA’s GR team recently reviewed an early draft document created by the House Ways and Means staff entitled “Extenders-Plus Package Proposal.” The proposal would include the following:
If you will recall, most of the extenders left behind (and remember all of these provisions were left behind intentionally, and supposedly forever) are related to renewable energy.
- All 29 provisions (see pages 2-6) that expired at the end of 2017 and 2018 would be extended retroactively to January 1, 2018 and forward through December 31, 2019 (-$17 billion).
- The Tax Cuts and Jobs Act’s increased estate tax exemption would sunset in 2023 instead of 2025 (+$25 billion).
- Disaster tax relief (including special rules allowing access to retirement funds, a credit for employee retention during business interruption, suspension of limits on deductions for certain charitable contributions, rules for deductions for disaster-related personal casualty losses, and special rules related to tax credit qualification) for disasters occurring between January 1, 2018 and 30 days after the date of enactment (-$8 billion).
- Two-year expansion of EITC for individuals with no qualifying children if the individual is between ages 19 and 25 and is not a full-time student; permanently modify the EITC rules to allow families with children without a valid Social Security Number to qualify like individuals with no qualifying children; allow credit eligibility in certain cases of married individuals living apart or where qualifying children are claimed by another family member; repeal provision that would deny the credit to taxpayers due to excess investment income; and permanent EITC match for Puerto Rico and other territories (-$25 billion).
- Two-year expansion of child and dependent care tax credit: doubling the CDCTC, increasing the income threshold above which the CDCTC is phased out from $15,000 to $120,000 (adjusted for inflation), and increasing the exclusion for employer-provided dependent care assistance from $5,000 to $7,500 (adjusted for inflation) (-$16 billion).
The most salient expired provisions are probably:
Though those of you with race horses and/or race cars—or with clients with same—may find other goodies.
- the §108(a)(1)(E) exclusion from gross income of discharge of indebtedness on principal residence
- the §163(h)(3)(E)(iv) treatment of premiums for certain qualified mortgage insurance as qualified residence interest
- the §222(e) deduction for qualified tuition and related expenses.
Congressional Research Service Wades into Politics of the Tax Cuts and Jobs Act
The Library of Congress, Congressional Research Service (CRS), has estimated the Tax Cuts and Jobs Act, signed into law by President Donald Trump at the end of 2017, had little or no impact on the U.S. economy’s strong performance in 2018. The CRS report concludes that while GDP rose 2.9 percent for the full calendar year, the economy would have performed at that level without the passage of the TCJA.
TIGTA Claims IRS Could Do More to Process and Track Tax Fraud
While IRS assessed close to $247 million based on public referrals of tax fraud, a TIGTA audit concludes IRS would do better if the agency provided an online referral application and generally made it easier for citizens to find information on its website about reporting tax fraud to the government.
File Under “Worst Kept Secret in D.C.”
Multiple news sources—as well as a reliable source at Treasury speaking recently to NAEA’s EVP—suggest final rules on SALT cap workarounds, including charitable contributions (or perhaps we should more accurately say “charitable contributions”) are coming soon.
In Rev. Proc. 2019-25, IRS provides 2020 inflation-adjusted limits for HSA contribution, deductible, and out-of-pocket expenses.
In Rev. Proc. 2019-26, IRS announces depreciation limits for owners of passenger cars first placed into service in 2019 as well as amounts to be included in income by lessees of passenger cars first leased in 2019
U.S. Tax Court
Judge Colvin presides over this week’s U.S. Tax Court case, Oliveri v. Commissioner (T.C. Memo 2019-57). Petitioner, since 1987, “has dedicated his life to being an evangelist…he considers all of his contact with members of the public to be opportunities for evangelism.” Nothing against evangelism, of course, but we are on the first page of findings of face and we suspect this does not bode well for Mr. Oliveri.
We have read more than our share of Tax Court cases and are constantly amazed at instances of poor recordkeeping and profound overreach (to put it kindly). In this case, petitioner deducts as charitable contributions the unreimbursed expenses for his own ministry (the Brothers and Sisters of Divine Mercy, which according to its mission statement, is responsible to the Pontifical Council of the Laity, a dicastery (n.b., we are a lapsed Lutheran and even the definition didn’t help our understanding) of the Catholic Church. Colvin notes drily, “Nothing in the record shows that the Catholic Church recognized or had any formal relationship with BSDM.” He deducted $15,000 “for expenses he characterized as ‘Evangelism: Christian Outreach,’” but which the court more accurately reclassified as “airplane rental and training.” The list goes on and on, but highlights (or lowlights, depending on one’s perspective) include “Evangelism: Evangelization Support,” which Judge Colvin translates to “internet and cable service in petitioner’s home.”
This does not end well for petitioner, but interestingly, IRS blows the §6662 accuracy-related penalty because the agency is unable to produce evidence of the requisite supervisory approval for the penalty.
| || EVERYTHING BUT THE KITCHEN SINK|
E@lert is back…for a limited engagement. Since last we spoke, you may have wondered who killed the weekend (bonus points for Dowager Countess reference), how not to care when people don’t like you (bonus points for David Foster Wallace and Infinite Jest, which we are certain NO ONE has ever read—we made a heroic 200 pages before waving the white flag), and why unread books are more valuable than read books.
We are just out of Memorial Day, which aside from the Indy 500 also marks the first weekend of summer, and we also offer you a list of 75 books to consider this summer.
Otherwise, aside from this nod to the late Tim Conway, we offer a bookshelf full of tax-related items, pulled especially for America’s Tax Experts®:
- In the wake of the recent brouhaha over the Free File program, IRS is bringing in an independent consultant to review the program.
- Treasury Secretary Mnuchin testified the nation may hit its debt ceiling sooner than expected (and nothing brings the crazy to the Hill like a good old-fashioned standoff on the debt ceiling, which most normal people simply accept as the price one pays for spending more than one earns).
- Senate Finance Committee Chairman Chuck Grassley (R-IA) writes that his committee has established bipartisan task forces to examine temporary tax provisions. One of several good quotes, “Ultimately, the job of these taskforces is to identify reform proposals so Congress can end the unfortunate practice of kicking the can down the road, one year at a time.” To which we say, emphatically, “amen.”
- The House passed a bipartisan retirement reform bill, which includes a number of provisions on which EAs should keep their eyes, including a provision repealing the maximum age for making contributions to traditional IRAs and raising the age at which RMDs are required.
- At Procedurally Taxing, a guest blogger takes us through a day in the life of a Tax Court judge.
- Kelly Phillips Erb, in Forbes, and also a featured speaker at NAEA’s 2019 National Conference and the 33rd National Tax Practice Institute™ (NTPI®), unpacks part of IRS’ recently released Data Book and concludes IRS is busier than ever.
- File under “realistic basis matters:” Real estate developer (and Miami Dolphins owner) Stephen Ross lost a Tax Court appeal, regarding a $33 million charitable deduction and a 40 percent gross valuation misstatement, in the D.C. Circuit Court of Appeals.
“That’s the big question, the one the world throws at you every morning. Here you are, alive. Would you like to make a comment?”
Mary Oliver (1935-2019), American poet
| || |
NAEA E@lert | Volume 1: Issue 28
Connect with NAEA
Recent Issues | Unsubscribe | Advertise | Web Version
Colby Horton, MultiView, Executive Vice-President, Publishing/Marketing, 469-420-2601 | Media Kit
Bethanney Standerfer, Content Editor, 469-420-2688 | Contribute news
National Association of Enrolled Agents
1730 Rhode Island Avenue, NW, Suite 400 | Washington, DC, 20036, United States
202-822-6232 | Contact Us
Learn how to add us to your safe sender list so our emails get to your inbox.
7701 Las Colinas Ridge, Ste. 800, Irving, TX 75063