Some expired tax extenders could be renewed as part of a federal spending bill. Further, the spending bill could also delay the medical device excise tax and reform multiemployer pension plans. Finally, the IRS issued much-anticipated guidance on withholding for 2018.
Lawmakers from both sides of the aisle have expressed support for extending the expired tax breaks. At this time, reports have surfaced that the extenders could be part of a government funding bill.
In addition, revival of the medical device tax has lawmakers from both parties calling for repeal or further delay of the tax. A temporary suspension of the tax expired after 2017.
Two House members, one Democrat and one Republican, are calling on Congress to return the state and local tax deduction to its pre-2018 parameters. Reps. Peter King, R-N.Y., and Nita Lowey, D-N.Y., said on January 9 that their proposal, the Securing Access to Lower Taxes by Ensuring (SALT) Deductibility Bill, would remove limits on the deduction under the Tax Cuts and Jobs Act (P.L. 115-97).
Moreover, a bipartisan proposal for changes to multiemployer pensions is taking shape on Capitol Hill. Rep. Donald Norcross, D-N.J., and Rep. Phil Roe, R-Tenn., said that they plan a bill that would allow some multiemployer plans to move to a hybrid structure.
Treasury Secretary Steven Mnuchin predicted that the IRS will hire more employees to implement the new tax law. Mnuchin said that the Trump Administration is in discussions with Congress about additional funding for the Service.
Withholding. The IRS has issued updated 2018 withholding tables to reflect the changes made by the Tax Cuts and Jobs Act (P.L. 115-97). According to the IRS, the updated 2018 withholding tables are designed to work with previously filed Forms W-4 (IR-2018-5).
NTA. A new report from the National Taxpayer Advocate (NTA) cautions that the IRS will be challenged by budgetary constraints to implement the new tax law. The NTA also made 50 legislative recommendations, including regulation of unenrolled return preparers (IR-2018-3).
Tax Scams. The IRS warned tax professionals that cybercriminals are again using email phishing schemes to steal clients’ identities. The Service reminded preparers to take steps to protect confidential information (IR-2018-2).
By George L. Yaksick, Jr., Wolters Kluwer News Staff