Weekly Report from Washington, D.C.

During the week of August 31, Congress announced that a “Tax Reform 2.0” legislative package would move through the House later than expected. TIGTA noted that the IRS needed to improve procedures in order to prevent the fraudulent use of third-party authorization forms to obtain taxpayer information.

Congress
A “Tax Reform 2.0” legislative package would move through the House later than expected. Some lawmakers are beginning to question its impact on upcoming midterm elections, which may result in a delayed full chamber vote (TAXDAY, 2018/08/30, C.1).

New IRS guidance aiming to curb certain state and local tax (SALT) deduction cap “workarounds” was the latest “hot topic” tax debate on Capitol Hill (TAXDAY, 2018/08/27, C.1).

Treasury
TIGTA Report. The IRS needed to improve procedures in order to prevent the fraudulent use of third-party authorization forms to obtain taxpayer information, according to a report by the Treasury Inspector General for Tax Administration (TIGTA), (Ref. No. 2018-40-062; TAXDAY, 2018/08/31, T.1).

TIGTA Report. The Treasury Inspector General for Tax Administration (TIGTA) released its report for fiscal year (FY) 2018 auditing the IRS’s compliance with restrictions on the use of enforcement statistics to evaluate employees as set forth in section 1204 of the IRS Restructuring and Reform Act of 1998 (P.L. 105-206), (Ref. No. 2018-30-055; TAXDAY, 2018/08/29, T.1).

TIGTA Report. The Treasury Inspector General for Tax Administration (TIGTA) released a report for fiscal year (FY) 2018 reviewing the IRS’s compliance with the prohibition against labeling taxpayers as Illegal Tax Protesters or any similar designations (Ref. No. 2018-30-056; TAXDAY, 2018/08/28, T.1).

TIGTA Report. The IRS complied with the legal requirements to notify taxpayers of their rights when requesting an extension of the statute of limitations for assessing additional taxes and penalties, according to a report by the Treasury Inspector General for Tax Administration (TIGTA), (Ref. No. 2018-30-059; TAXDAY, 2018/08/28, T.2).

IRS
LB&I. The IRS Large Business and International Division (LB&I) issued a directive providing instructions to LB&I examiners to manage issues under Code Sec. 1445 related to certain timeshare arrangements involving U.S. withholding agents (TAXDAY, 2018/08/31, I.1).

I.R.B. The IRS released I.R.B. 2018-36, dated September 4, 2018 (TAXDAY, 2018/08/31, I.2).

Tax Tip. The IRS provided guidance on changes to ABLE accounts (TAXDAY, 2018/08/31, I.3).

Tax Tip. The IRS provided tips to extension filers about the October 15 deadline (TAXDAY, 2018/08/30, I.2).

LB&I. The IRS Large Business and International Division (LB&I) issued a directive providing that LB&I examiners should not challenge an insurance company’s determination of tax reserves for certain variable annuity contracts and certain life insurance contracts, if the insurance company reports its tax reserves for fiscal year 2017 in compliance with this directive (TAXDAY, 2018/08/29, I.1).

Data Security Plan. The IRS urged tax professionals to be compliant with data security plan requirements (IR-2018-175; TAXDAY, 2018/08/29, I.2).

Notice. The IRS clarified who was a “qualifying relative” for the new $500 dependent credit and head of household filing status for tax years 2018-2025 (Notice 2018-70; TAXDAY, 2018/08/29, I.3).

Tax Tip. The IRS provided guidance for charities applying for tax-exempt status (TAXDAY, 2018/08/29, I.4).

Revenue Procedure. The IRS provided the domestic asset/liability percentages and domestic investment yields needed by foreign life insurance companies and foreign property and liability insurance companies to compute their minimum effectively connected net investment income under Code Sec. 842(b) for tax years beginning after December 31, 2016 (Rev. Proc. 2018-45; TAXDAY, 2018/08/28, I.1).

CAP Program. The IRS changed the Compliance Assurance Process (CAP) program for 2019 (IR-2018-174; TAXDAY, 2018/08/28, I.2).

Tax Tip. The IRS provided tips on filing Form 2290 (TAXDAY, 2018/08/28, I.3).

Notice. The temporary nondiscrimination relief for closed defined benefit plans provided in Notice 2014-5, I.R.B. 2014-2, 276, had been extended through plan years beginning in 2019 (Notice 2018-69; TAXDAY, 2018/08/27, I.1).

Foreign Earned Income Exclusion. The IRS reminded certain U.S. citizens and resident aliens who are contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones that they may now qualify for the foreign earned income exclusion (IR-2018-173; TAXDAY, 2018/08/27, I.2).

I.R.B. The IRS released I.R.B. 2018-35, dated August 27, 2018 (TAXDAY, 2018/08/27, I.3).

Miscellaneous
S Corporation Losses. Taxpayers who are shareholders in an S corporation may deduct their share of the S corporation’s losses only to the extent that the total does not exceed the basis of the shareholder’s stock and the basis of indebtedness owed to the shareholder by the corporation (TAXDAY, 2018/08/29, M.1).

RMD Rules. The required minimum distribution (RMD) rules limit the time that funds may remain tax-deferred in qualified retirement plans (TAXDAY, 2018/08/27, M.2).

Login to read more tax news on CCH® AnswerConnect or CCH® Intelliconnect®.

Not a subscriber? Sign up for a free trial or contact us for a representative.

AUTHOR

CCHTaxGroup

All stories by: CCHTaxGroup