Weekly Report from Washington, D.C.

Congress passed and the president signed the Bipartisan Budget Act of 2018 (P.L. 115-123), which, in addition of extending government spending, included extenders and other tax provisions. The White House nominated Charles P. Rettig for IRS commissioner. The Treasury updated its Guidance Plan for the Tax Cuts and Jobs Act (P.L. 115-97); while the IRS continued to focus on filing-season matters.

White House

Budget Bill, with Extenders. Congress approved after the eleventh hour and President Trump on February 9 signed into law the Bipartisan Budget Act of 2018. In addition to extending funding for the federal government through March 23, this new law included a number of tax extender provisions, as well as additional tax relief for victims of natural disasters in 2017 (TAXDAY, 2018/02/12, W.1).

IRS Commissioner. President Trump on February 8 announced his nomination of Charles P. Rettig for IRS commissioner. Rettig is currently a tax attorney in California (TAXDAY, 2018/02/09, W.1). Meanwhile, the IRS moved forward with tax filing season with a number of announcements.

Treasury

Guidance Plan Update. The Treasury and IRS released their second quarter update to the 2017-2018 Priority Guidance Plan. The updated 2017-2018 Priority Guidance Plan now contains 29 additional projects, including those that have become near term priorities as a result of the Tax Cut and Jobs Act of 2017. (2017-2018 Priority Guidance Plan; TAXDAY, 2018/02/08, T.1).

IRS

Puerto Rico LIHC Relief. The IRS has expanded low-income housing credit (LIHC) relief provided in Rev. Proc. 2014-49, I.R.B. 2014-37, 535, and Rev. Proc. 2014-50, I.R.B. 2014-37, 540, to owners of qualified low-income housing projects and to issuers of exempt facility bonds financing qualified residential rental projects affected by Hurricane Maria in the Commonwealth of Puerto Rico (Notice 2018-17 ; TAXDAY, 2018/02/09, I.2).

Identity Theft. Key indicators of identity theft dropped for the second year in a row in 2017. The IRS attributes the success to the Security Summit initiatives that help safeguard taxpayers’ interests. (IR-2018-21 ; TAXDAY, 2018/02/09, I.3).

Presidents’ Day. The IRS reports that February 20, the day after the Presidents’ Day holiday, will mark a peak time for the IRS. It is urging taxpayers to take advantage of the online tools available on the IRS website to find answers to tax questions (IR-2018-22 ; TAXDAY, 2018/02/09, I.4).

Exempt Organization Status Applications. In order to reduce the compliance burden on certain exempt organizations, the IRS has provided guidance that will generally allow domestic organizations exempt under Code Sec. 501(c) to change their form or state of organization without reapplying for exempt status (Rev. Proc. 2018-15 ; TAXDAY, 2018/02/09, I.5).

Qualified Opportunity Zones. The IRS has provided procedures for designating population census tracts as Qualified Opportunity Zones for purposes of Code Secs. 1400Z-1 and 1400Z-2, as added by the Tax Cuts and Jobs Act of 2017 (Rev. Proc. 2018-16, I.R.B. 2018-9; TAXDAY, 2018/02/09, I.6).

Filing Season. The IRS debunked various myths surrounding expected refunds and offered information on proper avenues available for making refund-related inquiries. The IRS began processing tax returns on January 29 (IR-2018-20 ; TAXDAY, 2018/02/08, I.2).

Casualty Losses. The IRS has modified the casualty loss safe harbor in Rev. Proc. 2017-60, 2017-50, 559. The safe harbor applies to individuals whose personal residence has a deteriorating concrete foundation containing the mineral pyrrhotite. The IRS has extended the time for individuals to repair damage caused by the presence of the mineral pyrrhotite in concrete foundations (Rev. Proc. 2018-14 ; TAXDAY, 2018/02/08, I.3).

Due Diligence. Return preparers have heightened due diligence requirements in dealing with certain tax credits, the IRS has reminded practitioners. The Service highlighted the American Opportunity Tax Credit (AOTC), child tax credit/additional child tax credit (CTC/ACTC) and the Earned Income Tax Credit (EITC) in an updated online training module (TAXDAY, 2018/02/07, I.1).

PPACA. The IRS posted updated best practices for return preparers addressing the Patient Protection and Affordable Care Act’s (ACA’s) (P.L. 111-148) individual shared responsibility requirement, also known as the individual mandate, on its website. The Service reminded preparers that the Tax Cuts and Jobs Act did not eliminate the individual shared responsibility requirement for 2017 (TAXDAY, 2018/02/06, I.1).

Form 1095-A. Taxpayers who receive corrected 2017 Forms 1095-A, Health Insurance Marketplace Statement, may need to file an amended return, if they have already filed, the IRS has reported. The Service highlighted some corrections that may require an amended return. The Service also instructed taxpayers what to do if they receive a “void” Form 1095-A (TAXDAY, 2018/02/08, I.1).

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

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