Weekly Report from Washington, D.C.

During the week of September 24, the House approved two tax bills that are part of Republicans’ three-pronged “Tax Reform 2.0”package. TIGTA noted the IRS had not effectively used the Bank Secrecy Act (BSA) program in several areas of its compliance efforts. The IRS released guidance stating that accrued market discount is not includible in income under Code Sec. 451(b).

Congress

The House approved two tax bills that are part of Republicans’ three-pronged “Tax Reform 2.0” package, (TAXDAY, 2018/09/28, C.1).

The IRS observed that cybercriminals’ efforts to steal taxpayer data and infiltrate IRS systems were on the rise, (TAXDAY, 2018/09/27, C.1).

Treasury

The Treasury Inspector General for Tax Administration (TIGTA) released its report on the status of the information technology organization’s system modifications required by the Tax Cuts and Jobs Act of 2017 (P.L. 115-97) for the 2019 filing season, (Ref. No. 2018-24-064; TAXDAY, 2018/09/28, T.1).

TIGTA noted that the IRS had not effectively used the Bank Secrecy Act (BSA) program in several areas of its compliance efforts, (Ref. No. 2018-30-071; TAXDAY, 2018/09/28, T.2).

The Financial Crimes Enforcement Network (FinCEN) provided filing relief to taxpayers who have been adversely affected by Hurricane Florence, (TAXDAY, 2018/09/28, T.3).

TIGTA observed that the IRS’s information security program was generally in alignment with the Federal Information Security Modernization Act of 2014 (FISMA) requirements, but it was not fully effective due to program attributes not yet implemented, (Ref. No. 2018-20-082; TAXDAY, 2018/09/27, T.1).

TIGTA noted that the IRS needs to effectively use Currency Transaction Report (CTR) information to select and examine taxpayers, (Ref. No. 2018-30-076; TAXDAY, 2018/09/27, T.2).

TIGTA observed that the IRS needs to make improvements to the withholding compliance program, (Ref. No. 2018-30-072; TAXDAY, 2018/09/26, T.1).

TIGTA found that the IRS’s efforts to ensure accuracy of treaty-based income exemptions claimed by some nonresident alien individuals were inadequate, (Ref. No. 2018-30-074; TAXDAY, 2018/09/26, T.2).

TIGTA noted that the IRS needs to fully implement audit recommendations related to cybersecurity to strengthen its security posture and protect taxpayer data, (Ref. No. 2018-20-066; TAXDAY, 2018/09/26, T.3).

TIGTA cautioned that improved controls were needed to ensure that corrective actions for reported information technology (IT) weaknesses were documented and fully implemented prior to closure, (Ref. No. 2018-20-063; TAXDAY, 2018/09/25, T.1).

TIGTA noted that the IRS experienced a systems outage on the last day of the 2018 filing season resulting in the failure of a storage array, (Ref. No. 2018-20-065; TAXDAY, 2018/09/25, T.2).

TIGTA observed that the IRS needs to make improvements to its SS-8 program in order to help workers and improve employment tax compliance, (Ref. No. 2018-30-077; TAXDAY, 2018/09/25, T.3).

TIGTA found that the IRS generally complied with the statutory requirement of notifying taxpayers when a Notice of Federal Tax Lien (NFTL) was filed, (Ref. No. 2018-30-080; TAXDAY, 2018/09/24, T.1).

TIGTA conducted a statutory review of denials of requests for information, (Ref. No. 2018-10-058; TAXDAY, 2018/09/24, T.2).

Internal Revenue Service

Scammers. The IRS urged taxpayers to remain vigilant of suspicious calls, emails and donation requests initiated by scammers especially around the October 15 tax-filing extension deadline, (IR-2018-193; TAXDAY, 2018/09/28, I.1).

Accrued Market Discount. The IRS released guidance stating that accrued market discount is not includible in income under Code Sec. 451(b), (Notice 2018-80; TAXDAY, 2018/09/28, I.2).

SIFL Mileage Rates. The IRS released the applicable terminal charge and the Standard Industry Fare Level (SIFL) mileage rates for determining the value of noncommercial flights on employer-provided aircraft in effect for the second half of 2018 for purposes of the taxation of fringe benefits, (Rev. Rul. 2018-26; TAXDAY, 2018/09/28, I.3).

IRB. The IRS released I.R.B. 2018-40, (TAXDAY, 2018/09/28, I.4).

FEMA. The Federal Emergency Management Agency (FEMA) announced that certain areas in Nebraska are eligible for assistance from the federal government as a result of severe storms, tornadoes, straight-line winds and flooding, (TAXDAY, 2018/09/28, I.5).

Data Security. The IRS provided tips to tax preparers on creating data security plans, (TAXDAY, 2018/09/28, I.6).

TAP. The Taxpayer Advocacy Panel Notices and Correspondence Project Committee meeting’s point of contact information was changed, (TAXDAY, 2018/09/27, I.1).

Per Diem. The IRS released the 2018-2019 special per diem rates, (Notice 2018-77; TAXDAY, 2018/09/27, I.2).

FEMA. FEMA announced that certain areas in Montana are eligible for assistance from the federal government as a result of flooding, (TAXDAY, 2018/09/27, I.3).

Volunteers. The IRS reminded IRS-certified volunteers that organizations around the country are looking for volunteers to help taxpayers, (TAXDAY, 2018/09/27, I.4).

ETAAC. The IRS announced the selection of two new members of the Electronic Tax Administration Advisory Committee (ETAAC), (TAXDAY, 2018/09/26, I.1).

Trade or Business Requirement. The IRS announced a study on Code Sec. 355 active trade or business requirement for entrepreneurial activities; (TAXDAY, 2018/09/26, I.2).

APMA Program. The IRS announced reorganization of the Advance Pricing and Mutual Agreement (APMA) program, (TAXDAY, 2018/09/26, I.3).

Disaster Relief. The IRS released a memo discussing disaster assistance relief, (TAXDAY, 2018/09/26, I.4).

New Business Tax Credit. The IRS reminded employers that they could be eligible for the New Business Tax Credit if they provide paid family and medical leave, (TAXDAY, 2018/09/26, I.5).

Employer Credit. The IRS provided guidance on employer credit for paid family and medical leave, (Notice 2018-71; IR-2018-191; TAXDAY, 2018/09/25, I.1).

Tax Resources. The IRS provided tax resources for disaster victims, (TAXDAY, 2018/09/25, I.2).

Regulations. The IRS proposed to remove Code Sec. 385 documentation regulations, (NPRM REG-130244-17; TAXDAY, 2018/09/24, I.1).

Moving Expenses. The IRS released guidance stating that employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes, (Notice 2018-75; IR-2018-190; TAXDAY, 2018/09/24, I.2).

Information Returns. The IRS provided the specifications for the private printing of red-ink substitutes for the 2018 revisions of information returns, preparing acceptable substitutes of the official forms, and using official or acceptable substitute forms to furnish information to recipients, (Rev. Proc. 2018-46; TAXDAY, 2018/09/24, I.3).

IRB. The IRS released I.R.B. 2018-39, (TAXDAY, 2018/09/24, I.4).

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