Weekly Report from Washington, D.C.

The Weekly Report form Washington, DC June 25 edition covers, the Senate Finance Committee (SFC) held a confirmation hearing for IRS Commissioner nominee Charles Rettig. Across the Capitol, House Ways and Means Committee Chairman Kevin Brady, R-Tex., said that a tax reform phase two outline will likely be unveiled to members in July.

Congress

President Donald Trump’s pick for IRS Commissioner told lawmakers that his top goal is to rebuild trust between the IRS, taxpayers, and Congress. IRS Commissioner Nominee Charles “Chuck” P. Rettig testified about his intentions before the Senate Finance Committee (SFC) in a June 28 nomination hearing.

A tax cuts “2.0” draft will likely be unveiled to House Republicans in July, the House’s top tax writer has said. A draft of the tax reform “phase two” legislative outline is expected to be released generally in August.

The Senate Finance Committee (SFC) has scheduled the much anticipated IRS Commissioner nomination hearing. President Donald Trump announced Charles P. Rettig as his pick for chief of the Service last February. Currently, Rettig is a tax attorney in California.

Treasury

The Cybersecurity Data Warehouse (CSDW) which stores taxpayer personally identifiable information, needs improved security controls, according to a report by the Treasury Inspector General for Tax Administration (TIGTA), (Ref. No. 2018-20-030)

Internal Revenue Service

Withholding. The IRS advised taxpayers who owed additional tax when they filed their 2017 federal tax return earlier this year that they can avoid another unexpected tax bill next year by doing a “paycheck checkup” as soon as possible. Significant changes effected by the Tax Cuts and Jobs Act can have a big impact on the tax refund or balance due on the tax returns filed next year (IR-2018-145)

National Taxpayer Advocate. National Taxpayer Advocate Nina E. Olson has released her mid-year report to Congress. The report contains a review of the 2018 filing season, identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the upcoming fiscal year, and contains the IRS’s responses to each of the 100 administrative recommendations Ms. Olson made in her 2017 Annual Report to Congress, (IR-2018-143)

ETAAC. The Electronic Tax Administration Advisory Committee (ETAAC) presented its 2018 annual report to IRS Acting Commissioner David Kautter during a public meeting (IR-2018-144)

IRS Tax Forums. The IRS reminded tax professionals that they can save $115 by registering soon for the IRS Nationwide Tax Forum in National Harbor, Md. The forum, located in the Washington, D.C., metro area, will take place July 17-19, 2018, and will focus on tax reform and cybersecurity issues, (IR-2018-14)

Returns. The IRS has urged residents of Puerto Rico, the U.S. Virgin Islands and American Samoa who were affected by last year’s hurricanes and tropical storms to file a 2017 federal income tax return or pay their 2017 tax by Friday, June 29, (IR-2018-142)

Hearing Notice. The IRS has scheduled a hearing on proposed changes to the regulations under Code Sec. 7602(a) relating to administrative proceedings. The public hearing will be held on Tuesday, July 31, 2018, at 10:00 a.m. in the IRS Auditorium, Internal Revenue Service Building, 1111 Constitution Avenue NW., Washington, D.C. 20224

DPGR. An entity that granted software licenses to franchisees was required to use its license agreements’ separately stated prices to differentiate between gross receipts attributable to Domestic Production Gross Receipts (DPGR) and gross receipts that did not qualify as DPGR, (Field Attorney Advice 20182501F).

Commitment Fees. An accrual basis taxpayer was not required to capitalize the commitment fees paid in connection with a revolving credit facility and he could deduct the commitment fees in the taxable year in which they were incurred. The payment was an ordinary and necessary expense deductible under Code Sec. 162(a) subject to the capitalization rules of Code Sec. 263(a) (Field Attorney Advice 20182502F)

Charity. The IRS has announced that the following organizations no longer qualify under Code Sec. 170(c)(2) as an organization for which deductions for charitable contributions are allowed (Announcement 2018-10)

Guidance. The IRS has provided guidance and a safe harbor to determine when construction of “energy property” begins for purposes of the energy investment tax credit, or ITC under Code Sec. 48 (Notice 2018-59)

Tax Tips

Taxpayers who make an effort to comply with the law, but are unable to meet their tax obligations due to circumstances beyond their control may qualify for relief from penalties.

Taxpayers can sign up to receive IRS email subscription services.

The IRS reminds taxpayers that the agency does not initiate contact with taxpayers by email or text messages to request personal or financial information. This includes requests for PIN numbers, passwords or similar information for credit cards, banks and other financial accounts.

TIN holders who expect to file a tax return in 2019 must submit their renewal applications as soon as possible to beat the rush and avoid refund delays next year.

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CCHTaxGroup

All stories by: CCHTaxGroup