Weekly Report from Washington, D.C.

During the week of July 16, the Senate Finance Committee (SFC) advanced President Donald Trump’s nomination of Charles Rettig for IRS Commissioner. The SFC approved the nomination on July 19 by a 14-to-13 party line vote (TAXDAY, 2018/07/20, C.1).

Congress

House GOP tax writers geared up to release a “Tax Cuts 2.0” outline next week. The legislative outline of House Republican tax proposals, also known on Capitol Hill as tax reform “phase two” is expected to be released later in the week of July 23 (TAXDAY, 2018/07/20, C.2).

JCT provided a technical explanation of the Taxpayer First Act of 2018 (JCX-65-18; TAXDAY, 2018/07/20, C.3).

The Senate Finance Committee’s (SFC) leading Democrat released a report critiquing Republicans’ 2017 overhaul of the tax code. The report, which focused primarily on international tax reform, was released by SFC ranking member Ron Wyden, D-Ore., on July 18 (TAXDAY, 2018/07/19, C.1).

President Trump and House GOP tax writers discussed “Tax Cuts 2.0” in a July 17 meeting at the White House. The next round of tax cuts would focus primarily on the individual side of the tax code, both Trump and House Ways and Means Chair Kevin Brady, R-Tex., told reporters before the meeting, (TAXDAY, 2018/07/18, C.1).

Treasury

Comment Request. The Treasury’s Financial Crimes Enforcement Network has requested comments on various documents, (TAXDAY, 2018/07/19, T.1).

TIGTA Report. The IRS needs to strengthen its management controls to improve the reliability of the Service’s hardware asset inventory, according to a new report by the Treasury Inspector General for Tax Administration (TIGTA), (Ref. No. 2018-20-041; TAXDAY, 2018/07/17, T.1).

IRS

Regulation. Employers may use forfeitures to fund qualified matching contributions (QMACs) or qualified nonelective contributions (QNECs) under the Code Sec. 401(k) safe harbor rules. Under the new rule, distribution and forfeiture requirements are applied at the time of allocation. The new rule applies to plan years beginning on or after July 20, 2018, but plans may use the new rule for earlier periods (T.D. 9835; TAXDAY, 2018/07/20, I.1).

Delegation Order. The IRS commissioner has issued a delegation order discussing the authority to abate substantial qualified first tier excise tax amounts. The order, which superseded Delegation Order No. 7-11, was effective July 2, 2018, (CDO No. 7-11 (Rev. 1); TAXDAY, 2018/07/20, I.2).

LB&I. The Large Business and International (LB& I) Division issued a new IRS Practice Unit, Transaction Costs Overview. IRS Practice Units provide explanations of general tax concepts, as well as information on specific types of transactions, (TAXDAY, 2018/07/20, I.3).

FEMA Notices. The Federal Emergency Management Agency (FEMA) announced that the president on June 8, 2018, determined that certain areas in New Jersey and New Hampshire were eligible for assistance from the federal government under the Disaster Relief and Emergency Assistance Act (42 USC 5121), (TAXDAY, 2018/07/20, I.5).

Tax Tip. Taxpayers issued tips on contact by IRS officials (TAXDAY, 2018/07/20, I.6).

CCDM. The IRS informed taxpayers that the Chief Counsel Directives Manual (CCDM) was being revised to reflect updated procedures on proper headings for briefs filed with the Tax Court. In a recent case in which the Tax Court ordered the parties to file simultaneous briefs, the court issued a “Notice of Docket Change” revising the title of the respondent’s “Reply Brief” to “Answering Brief”, (Chief Counsel Notice CC-2018-009; TAXDAY, 2018/07/19, I.1).

Comment Request. The IRS requested comments on various individual income tax return forms (TAXDAY, 2018/07/19, I.2).

FEMA Notices. The Federal Emergency Management Agency (FEMA) announced that the president on June 25, 2018, determined that certain areas in Oklahoma and Maryland were eligible for assistance from the federal government under the Disaster Relief and Emergency Assistance Act (42 USC 5121), (TAXDAY, 2018/07/19, I.3).

Tax Tip. The IRS reminded extension filers of October 15 income tax filing deadline (TAXDAY, 2018/07/19, I.4).

Guidance. The IRS has released a revenue procedure containing specifications for tax-exempt organizations, other than charities exempt under Code Sec. 501(c)(3), related to reporting the names and addresses of contributors on Schedule B when filing their information returns. Organizations exempt from tax under Code Sec. 501(a) and that were required to file Form 990, Return of Organization Exempt from Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, would still be required to collect and record this donor information, and make it available to the IRS upon request, (Rev. Proc. 2018-38; TAXDAY, 2018/07/18, I.1).

Revenue Ruling. The IRS has released various prescribed rates for federal income tax purposes for August 2018 (Rev. Rul. 2018-21; TAXDAY, 2018/07/18, I.2).

Security Summit. The IRS along with Security Summit partners offered important tips, dubbed “Security Six” protections, to help tax professionals protect their computers and email as well as safeguard sensitive taxpayer data. The “Security Six” protections is the second in a series called “Protect Your Clients; Protect Yourself: Tax Security 101”, (IR-2018-150; TAXDAY, 2018/07/18, I.3).

Tax Tip. The IRS discussed community tax volunteering options, (TAXDAY, 2018/07/18, I.5).

NPRM Regulation. Proposed regulations amending rules for determining whether information returns must be filed by using magnetic media (electronically) were corrected (NPRM REG-102951-16, Correction; TAXDAY, 2018/07/17, I.1).

PMTA. PMTAs discussed Form 8300 nonfiling examinations, digital signatures and more (TAXDAY, 2018/07/17, I.2).

FEMA Notices. The Federal Emergency Management Agency (FEMA) announced that the president determined that certain areas in Alaska and Massachusetts were eligible for assistance from the federal government under the Disaster Relief and Emergency Assistance Act (42 USC 5121), (TAXDAY, 2018/07/17, I.3).

Tax Tip. Taxpayers advised to utilize self-help tax tools available on IRS website, (TAXDAY, 2018/07/17, I.4).

Notice. For pension plan years beginning in July 2018, the IRS has released the 30-year Treasury bond weighted average interest rate, the unadjusted segment rates, the adjusted rates and the minimum present value segment rates, (Notice 2018-60; TAXDAY, 2018/07/16, I.1).

Notice. The IRS will issue regulations clarifying that estate and nongrantor trust expenses under Code Sec. 67(e) remained deductible. These expenses are not subject to the suspension, for tax years beginning after 2017 and before 2026, of miscellaneous itemized deductions subject to the 2-percent floor (Notice 2018-61; TAXDAY, 2018/07/16, I.2).

Regulation. The IRS will amend the 2016 proposed return preparer rules to reflect a recent law change. The preparer penalty was expanded to apply to preparers who failed to use due diligence when determining head of household status (NPRM REG-103474-18; TAXDAY, 2018/07/16, I.3).

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CCHTaxGroup

All stories by: CCHTaxGroup