It was a busy week in Washington as the House passed several bills that aim to reform the IRS. Meanwhile, the IRS’s computer system suffered a meltdown on Tax Day.
House. The House on April 18 approved the two largest bills of a bipartisan IRS reform package. The bills aim to restructure the IRS for the first time in 20 years. The 21st Century IRS Bill (HR 5445) was approved 414-to-0 and the Taxpayer First Bill (HR 5444) passed by a 414-to-3 vote.
Acting IRS Commissioner David Kautter told House lawmakers the IRS would not penalize taxpayers for the technical difficulties the IRS had on Tax Day. Following Kautter’s statement, the IRS provided an additional day for taxpayers to file and pay their taxes. Individuals and businesses had until midnight on Wednesday, April 18, to file 2017 returns.
The House approved seven bills on April 17 by voice vote. These bills are part of a larger bipartisan IRS reform package. The entire package of bills was approved by the Ways and Means Committee last week.
Certain Treasury regulations will now be subject to additional oversight by the Office of Management and Budget (OMB). A Memorandum of Agreement (MOA) between Treasury and OMB specifies the terms under which the OMB will review future tax regulations.
Members of the U.S. Armed Forces who served in the Sinai Peninsula of Egypt can now take advantage of combat zone tax benefits retroactive to June 2015. Among other benefits, eligible military members may exclude part or all of their combat pay from their federal taxable income. Eligible taxpayers can file amended tax returns to redeem retroactive tax benefits.
The IRS issued guidance on the changes to the federal income tax rates for corporations and the repeal of the corporate alternative minimum tax (AMT) by the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97). Also, the guidance covered the application of the tax proration rules to corporations with a tax year beginning before January 1, 2018, and ending after December 31, 2017.
The IRS released the 30-year Treasury bond weighted average interest rate, the unadjusted segment rates, the adjusted rates and the minimum present value segment rates.
The IRS issued “luxury car” depreciation caps for vehicles first placed in service during calendar year 2018. For passenger automobiles first placed in service in 2018 the depreciation limits for the first three years are $10,000, $16,000, and $9,600, respectively, and $5,760 for each succeeding year.
The IRS modified certain inflation-adjustments found in Rev. Proc. 2018-18. The modifications reflect the increase in the state housing credit ceiling and correct the alternative minimum tax phaseout for estates and trusts. These changes were made by the Consolidated Appropriations Act, 2018 (P.L. 115-141). Generally, the inflation-adjusted figures apply to tax years beginning in 2018.
The IRS published inflation adjustment factor and reference prices for determining the renewable electricity production and refined coal production credits. The inflation adjustment factor and reference prices apply to calendar year 2018 sales of kilowatt hours of electricity from qualified energy resources and to 2018 sales of refined coal produced in the U.S. or one of its possessions.