Weekly Report from Washington, D.C.

The House and Senate versions of tax reform legislation have gone to conference to iron-out differences between the two bills. In addition, the IRS announced that interest rates remain unchanged for the first quarter of 2018. Also, the IRS posted guidance on retirement plans, compensation, and the individual mandate.

Congress

The Senate on December 6 voted to go to conference with the House on the Tax Cut and Jobs Bill (HR 1), setting the stage for tax negotiations between the two chambers. The House on December 4  voted to head to conference with the Senate.

IRS

This week, the IRS announced that interest rates would remain the same in the first quarter of 2018. In addition, the IRS provided guidance for retirement plans, deferred compensation plans and donor advised funds. Further, the IRS provided guidance on how to compute the affordability exemption for the individual shared responsibility requirement.

Interest Rates.

The IRS announced that interest rates remain unchanged for the calendar quarter beginning January 1, 2018. Therefore, interest rates will be 4-percent for overpayments (3-percent in the case of a corporation), 4-percent for underpayments and 6-percent for large corporate underpayments. Further, the interest rate for the portion of a corporate overpayment exceeding $10,000 is 1.5-percent (IR-2017-200, Rev. Rul. 2017-25).

Retirement Plans.

The IRS released the 2017 Required Amendments (RA) List for individually designed qualified retirement plans. This list identifies changes in qualification requirements that became effective in 2017 (Notice 2017-72).

Compensation.

The IRS provided guidance on certain Code Sec. 457A deferrals. Generally, Code Sec. 457A provides that compensation deferred under a nonqualified entity’s nonqualified deferred compensation plan is included in gross income when there is no substantial risk of forfeiture (Notice 2017-75).

Individual Mandate.

The IRS provided guidance on computing the affordability exemption for the individual shared responsibility requirement. Reportedly, some individuals may not have access to bronze-level plans in the Marketplace (Notice 2017-74).

Donor Advised Funds.

The IRS posted interim guidance on several issues involving sponsoring organizations’ donor advised funds (DAFs). Further, the IRS described possible approaches to addressing various DAF issues (Notice 2017-73).

ITINs.

The IRS reminded taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) to renew them as soon as possible. Failure to renew expiring ITINs will result in processing and refund delays (IR-2017-199).

By Jessica Jeane, George Jones and George L. Yaksick, Jr., Wolters Kluwer News Staff

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