Weekly Report from Washington, D.C.

The House Ways and Means Committee approved a bipartisan IRS reform package. A House floor vote is expected the week of April 16.

White House

The White House and Republican lawmakers are continuing discussions focused on a second round of tax reform, (TAXDAY, 2018/04/09, W.1).

Congress

Senate. Acting IRS Commissioner David Kautter provided members of the Senate Finance Committee (SFC) with an update on the 2018 tax filing season and IRS operations (TAXDAY, 2018/04/13, C.1).

House. The House Ways and Means Committee approved a bipartisan package of bills to restructure the IRS for the first time in 20 years (TAXDAY, 2018/04/12, C.1.

Acting IRS Commissioner David Kautter told lawmakers in a House Appropriations Financial Services Subcommittee hearing that implementing tax reform is one of the IRS’s highest priorities, but issuing guidance will likely take years (TAXDAY, 2018/04/12, C.2).

The Joint Committee on Taxation (JCT) issued an overview of the Ways and Means Committee’s now approved bipartisan IRS reform bills (TAXDAY, 2018/04/11, C.1).

Treasury

The IRS was found to be noncompliant with the improper payment reporting requirements of the Improper Payments Elimination and Recovery Act (IPERA) for fiscal year 2017, according to an audit report by the Treasury Inspector General for Tax Administration (TIGTA), (Ref. No. 2018-40-032), TAXDAY, 2018/04/13, T.1).

Treasury Secretary Steven Mnuchin discussed the President’s Budget and highlighted the importance of concessional funds that become instrumental in promoting economic policies, (TDNR SM-0344, SM-0346, SM-0347), (TAXDAY, 2018/04/13, T.2).

The Treasury and the Office of Management and Budget (OMB) released a Memorandum of Agreement (MOA) relaying the prospect of OMB’s Office of Information and Regulatory Affairs (OIRA) reviewing a subset of tax regulatory actions, (TDNR SM-0345), (TAXDAY, 2018/04/13, T.3).

The Treasury Inspector General for Tax Administration (TIGTA) has issued a report, Interim Results of the 2018 Filing Season, which details the challenges and successes of the current filing season, (Ref. No. 2018-40-028), (TAXDAY, 2018/04/10, T.1).

The Treasury and the IRS have designated Opportunity Zones in 15 states and three territories. Private investments in these specific Qualified Opportunity Zones get preferential tax treatment under the Tax Cuts and Jobs Act of 2017 (P.L. 115-97), (TDNR SM-0341), (TAXDAY, 2018/04/10, T.2).

IRS

Guidance. The IRS has issued transitional guidance on the proper accounting method for including advance payments in income following amendments to Code Sec. 451 by the Tax Cuts and Jobs Act (P.L. 115-97). The legislative change essentially codified the rules in Rev. Proc. 2004-34, 2004-1 CB 991, by allowing accrual-method taxpayers to elect to defer including advance payments in income for a limited time, (Notice 2018-35), (TAXDAY, 2018/04/13, I.1).

Regulations. The IRS has announced its intent to issue regulations regarding the continued application of Code Sec. 682 with respect to the treatment of trust income payable to a former spouse who was divorced or legally separated under a divorce or separation agreement that was executed on or before December 31, 2018, except in those cases where the agreement was modified after that date and the modification indicates the parties’ intent to have the changes made by the Tax Cuts and Jobs Act (P.L. 115-97) apply, (Notice 2018-37), (TAXDAY, 2018/04/13, I.2).

Fuel. The IRS has published the nonconventional source fuel reference price for calendar year 2017, (TAXDAY, 2018/04/12, I.1).

VITA. Application packages for the 2019 Community Volunteer Income Tax Assistance (VITA) Matching Grant Program will be available beginning May 1, 2018, (TAXDAY, 2018/04/12, I.2).

TCE. Application packages for 2018 Tax Counseling for the Elderly (TCE) Program will be available beginning May 1, 2018, (TAXDAY, 2018/04/12, I.3).

Debt instruments. The IRS has provided the dollar amounts, increased by the 2018 inflation adjustment, for Code Sec. 1274A debt instruments arising out of sales or exchanges (Rev. Rul. 2018-11), (TAXDAY, 2018/04/12, I.4).

Filing. With the tax filing deadline fast approaching, the IRS has informed taxpayers about a newly updated and mobile friendly IRS.gov website for last-minute tax filing help, (IR-2018-91), (TAXDAY, 2018/04/12, I.5).

Bonds. Bond issuers may take remedial actions to preserve the status of certain state and local tax-exempt bonds and other tax-advantaged bonds after nonqualified uses of the bond proceeds, (Rev. Proc. 2018-26), (TAXDAY, 2018/04/12, I.6).

Fraud. The IRS has cautioned taxpayers against dishonest and unscrupulous tax return preparers, especially “ghost” return preparers who perpetuate tax refund fraud and scams, (IR-2018-89), (TAXDAY, 2018/04/11, I.1).

Guidance. The IRS Chief Counsel has provided guidance to attorneys, specifically, in connection with the IRS’s passport certification process and the limited scope of the right to judicial review available to taxpayer, (CC-2018-005), (TAXDAY, 2018/04/11, I.2).

Guidance. As the April 17 deadline approaches, the IRS has reminded taxpayers of the benefits of using electronic direct deposit and provided other last-minute filing tips, (IR-2018-90), (TAXDAY, 2018/04/11, I.3).

Reporting. U.S. citizens and resident aliens, including those with dual citizenship, that have foreign financial accounts must report their foreign assets and may be subject to a U.S. tax obligation, (IR-2018-87; FS-2018-7), (TAXDAY, 2018/04/10, I.1).

Guidance. The IRS has released Publication 5292 that provides guidance in connection with 2017 transition tax reporting on untaxed foreign earnings, (Publication 5292), (TAXDAY, 2018/04/10, I.2).

Fraud. As the April 17 deadline approaches, the IRS, along with Security Summit partners, has warned taxpayers and tax professionals against tax-related identity theft scams, especially a new email version pretending to be from “IRS Refunds,” (IR-2018-88), (TAXDAY, 2018/04/10, I.3).

TAPs. Certain Taxpayer Advocacy Panels (TAPs) have scheduled open meetings (TAXDAY, 2018/04/09, I.2).

IRB. The IRS has released I.R.B. 2018-15, dated April 9, 2018, (TAXDAY, 2018/04/09, I.3).

Filing. The IRS has urged taxpayers to file their returns electronically to avoid common tax-filing errors as they rush to meet the fast approaching April 17 filing deadline, (IR-2018-86), (TAXDAY, 2018/04/09, I.4).

Waiver. The IRS has provided a waiver for any individual who failed to meet the eligibility requirements of Code Sec. 911(d)(1) because adverse conditions in a foreign country precluded the individual from meeting the requirements for the 2016 tax year, (Rev. Proc. 2018-23), (TAXDAY, 2018/04/09, I.5).

By Jessica Jeane, Wolters Kluwer News Staff

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