Legislation (HR 195) passed and signed into law on January 22 temporarily ended the federal government shutdown. Also, among its other provisions, it delays collection of three taxes under the Affordable Care Act (P.L. 111-148 ). Meanwhile, the IRS issued additional guidance on the new “transition tax” under the Tax Cuts and Jobs Act. And, a safe harbor for meeting the continuity-of-interest rule for certain reorganizations.
President Trump signed legislation (HR 195 ) on January 22 to delay the medical device excise tax, the health insurance provider fee and the excise tax on high-dollar health plans. All three taxes were delayed in a temporary funding bill.
President Trump is expected to release his fiscal year (FY) 2019 budget on February 12. The president is likely to renew his call to repeal the Patient Protection and Affordable Care Act’s (ACA) taxes. Also, the FY 2019 budget may ask for more IRS funding to help the agency implement the Tax Cuts and Jobs Act (P.L. 115-97 ) and tax incentives for infrastructure spending.
Corporate Reorganizations. The IRS issued a revenue procedure that provides safe harbor valuation methods for valuing certain stock of an issuing corporation received by a target corporation’s shareholders in a potential reorganization for purposes of determining if the continuity of interest (COI) is met (Rev. Proc. 2018-12)
Transition Tax. The IRS provided additional guidance dealing with the “transition tax” on the untaxed foreign earnings of U.S. companies’ foreign subsidiaries. The transition tax was enacted as part of the Tax Cuts and Jobs Act (P.L. 115-97 ) (IR-2018-9 , Notice 2018-13 .
Social Welfare Organizations. The IRS issued a new application form for organizations applying for tax-exempt status under Code Sec. 501(c)(4) : Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code (Rev. Proc. 2018-10).
Insurance Companies. The IRS provided insurance companies with tables setting forth the unpaid loss discount factors and salvage discount factors for the 2017 accident year for use in tax year beginning on or before December 31, 2017 (Rev. Proc. 2018-13).
Earned Income Credit. In marking Earned Income Tax Credit (EITC) Week, the IRS issued a series of news releases and tax tips reminding various taxpayers of the EITC. These groups included:
- Native Americans (IR-2018-12 );
- members of the military and veterans (IRS Tax Tip 2018-12);
- individuals with disabilities (IR-2018-11);
- rural taxpayers (IRS Tax Tip 2018-11);
- hurricane victims (IR-2018-10 ); and
- grandparents (IRS Tax Tip 2018-10).
By George Jones, Wolters Kluwer News Staff