The IRS could issue guidance on the new Code Sec. 199A passthrough deduction in a “couple of weeks,” Acting IRS Commissioner David Kautter has reportedly said. While speaking on June 8 at the University of Virginia 70th Annual Conference on Federal Taxation, Kautter announced that the release of the proposed regulations would likely be earlier than originally expected. Previously, Kautter estimated that the IRS would release the passthrough deduction guidance sometime in July.
The new passthrough deduction was enacted under the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97) last December. A 20 percent deduction for income from pass-through entities is provided under the new law. Further, the deduction is limited by certain factors including business activities, wages paid by the business, and property values.
Section 199A Guidance
Generally, Kautter has said that the “complex” passthrough deduction will be a significant challenge for taxpayers and practitioners, according to several reports. Moreover, Kautter expects that the proposed passthrough guidance will not answer every question practitioners have, an IRS spokesperson previously told Wolters Kluwer.
“We are focused primarily on aggregation rules, antiabuse rules, the general rules, and then the definition of specified services,” Kautter said at the tax conference. Additionally, Kautter is reportedly hopeful that the passthrough deduction guidance will be finalized this year.
By Jessica Jeane, Wolters Kluwer News Staff