Weekly Report from Washington, D.C.

During the week of October 15, 2018, the House Republican’s top tax writers introduced a bipartisan bill to prevent duplicative taxation on digital goods and services. The IRS provided additional guidance to taxpayers who hold investments in one or more segregated asset accounts on which variable contracts as defined in Code Sec. 817.

Congress

House tax writers introduced a bipartisan bill to prevent duplicative taxation on digital goods and services. The bill aims to establish a framework across multiple jurisdictions for taxation of digital goods and services, including electronic music, literature, and mobile apps, among other things, (TAXDAY, 2018/10/15, C.1).

Internal Revenue Service

ACA Notice. The IRS provided that for purposes of the premium tax credit and shared responsibility payments, a taxpayer is considered to have claimed a personal exemption deduction: (1) for him or herself for a tax year, if the taxpayer files an income tax return for the year and does not qualify as a dependent of another taxpayer for the year; and (2) for an individual other than the taxpayer, if the taxpayer is allowed a personal exemption deduction for the individual and lists the individual’s name and TIN on the Form 1040, U.S. Individual Income Tax Return, or Form 1040NR, U.S. Nonresident Alien Income Tax Return, the taxpayer files for the year, (Notice 2018-84, TAXDAY, 2018/10/19, I.1).

Reduced Withholding Rate. The IRS urged small businesses and other payers to check out the agency’s newly revised backup withholding publication, available on IRS.gov. According to the Service, Publication 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), has been updated to reflect a key change made by the Tax Cuts and Jobs Act (TCJA), (IR-2018-205; TAXDAY, 2018/10/19, I.2).

Announcement. The IRS’s Office of Professional Responsibility published the names of attorneys, certified public accountants (CPAs), enrolled agents, enrolled actuaries, enrolled retirement plan agents and appraisers who have been disbarred from practice before the IRS, have consented to suspensions from practice, have been placed under suspension from practice under the expedited proceeding provisions, or have consented to the issuance of a censure, (Announcement 2018-13; TAXDAY, 2018/10/19, I.3).

PATH Act Notice. If an entity makes an aggregation disaggregation election under the special rules of Section 336 of the PATH Act (P.L. 114-113) and subsequently revokes it, the entity must provide a copy of the revocation to the IRS upon request by the IRS. This rule is effective for revocations of elections made on or after October 22, 2018, (Notice 2018-81; TAXDAY, 2018/10/19, I.4).

Internal Revenue Bulletin. The IRS released I.R.B. 2018-43 dated October 22, 2018, (TAXDAY, 2018/10/19, I.5).

Comment Request. The IRS requested comments on Form 8832, (TAXDAY, 2018/10/19, I.7).

Tax Tip. Employers provided tips on changes to fringe benefits post tax reform, (TAXDAY, 2018/10/19, I.8).

FBAR Relief. The Financial Crimes Enforcement Network (FinCEN) provided filing relief to taxpayers who had been adversely affected by Hurricane Michael. Victims in affected areas of Florida and Georgia have until February 28, 2019 to file their Report of Foreign Bank and Financial Account (FBAR) forms for the 2017 calendar year, (TAXDAY, 2018/10/18, I.1).

Tax Tip. The IRS provided tips on changes to real estate rehabilitation tax credit post tax reform, (TAXDAY, 2018/10/18, I.2).

Deemed Issuance Ratio Election. Insurance companies and other taxpayers that hold investments in one or more segregated asset accounts underlying variable contracts were allowed to make a deemed-issuance-ratio election. Under the election, certain mortgage-backed securities were treated as having deemed issuers for purposes of the Code Sec. 817(h) diversification requirements, (Rev. Proc. 2018-54; TAXDAY, 2018/10/17, I.1).

Disaster Notice. The president declared federal disaster areas in Georgia. The disaster is due to Hurricane Michael beginning on October 9, 2018, ( TAXDAY, 2018/10/17, I.2).

Delegation Order. The IRS commissioner issued a delegation order delegating authorities regarding Certified Professional Employer Organization (CPEO) certifications, ( TAXDAY, 2018/10/17, I.3).

Disaster Notice. The president declared a federal disaster area in Virginia. The disaster is due to Hurricane Florence, which began on September 8, 2018, ( TAXDAY, 2018/10/17, I.4).

Proposed Regulation. The IRS held an October 16 public hearing on proposed rules for the new Code Sec. 199A passthrough deduction at its headquarters in Washington D.C. The IRS released the proposed regulations, REG-107892-18, on August 8, (TAXDAY, 2018/10/17, I.5).

Revenue Ruling. The IRS provided various prescribed rates for federal income tax purposes for November 2018, (Rev. Rul. 2018-28; TAXDAY, 2018/10/17, I.6).

Effects of Tax Reform. The IRS highlighted the effects of the newly implemented tax reform legislation on small businesses and self-employed individuals, (IR-2018-203; TAXDAY, 2018/10/17, I.7).

Emergency Housing. The IRS authorized owners and operators of low-income housing to disregard the income limits, transience rules and certain other restrictions that normally apply to low-income housing units when providing temporary emergency housing to displaced individuals, (IR-2018-204; TAXDAY, 2018/10/17, I.8).

Tax Tip. The IRS provided tips to tax preparers on ways to report data theft, (TAXDAY, 2018/10/17, I.9).

IRPAC Meeting. The Information Reporting Program Advisory Committee (IRPAC) would hold a public meeting on Wednesday, October 24, 2018, from 9:00 a.m. to 1:00 p.m. at the Melrose Georgetown Hotel, 2430 Pennsylvania Ave., NW., Washington, D.C. 20037, (TAXDAY, 2018/10/16, I.1).

Current Plan Liability Rates. The IRS released 30-year Treasury bond weighted average interest rate, unadjusted segment rates, adjusted rates and minimum present value segment rates for pension plan years beginning in October 2018, (Notice 2018-82; TAXDAY, 2018/10/16, I.2).

Passthrough Deduction Proposed Regulations. The IRS scheduled on October 16 a public hearing on proposed regulations for the new Code Sec. 199A passthrough deduction, (TAXDAY, 2018/10/16, I.3).

CE Credits. The IRS informed tax professionals that they can earn continuing education (CE) credits thanks to the 2018 launch of the IRS Nationwide Tax Forums Online (NTFO), (IR-2018-201; TAXDAY, 2018/10/16, I.4).

Disaster Relief. The IRS granted more Hurricane Michael and Florence victims tax relief, IR-2018-202; TAXDAY, 2018/10/16, I.5).

Disaster Relief. The IRS announced that it will not impose a penalty when dyed diesel fuel is sold for use or used on the highway in the state of Florida, (IR-2018-200; TAXDAY, 2018/10/16, I.6).

Tax Tip. The IRS reminded extension filers of filing deadline, (TAXDAY, 2018/10/16, I.8).

NPRM Regulation. The IRS would remove Reg. §1.451-5, an obsolete advance payment regulation, (REG-104872-18;TAXDAY, 2018/10/15, I.1).

NPRM Regulation. The Treasury Department and the IRS proposed regulations on the penalties for failure to file correct information returns under Code Sec. 6721 and failure to furnish correct payee statements under Code Sec. 6722, (REG-118826-16;TAXDAY, 2018/10/15, I.2).

Hearing Notice. The IRS scheduled a hearing on proposed changes to the regulations under Code Sec. 965 relating to transition tax as amended by the Tax Cuts and Jobs Act (P.L. 115-97), (REG-104226-18, published in the Federal Register on August 9, 2018; TAXDAY, 2018/08/03, I.2), (TAXDAY, 2018/10/15, I.3).

Revenue Procedure. The IRS increased the user fee for processing applications for U.S. residency certification, (Rev. Proc. 2018-50; TAXDAY, 2018/10/15, I.4).

Hurricane Michael. The IRS provided relief to victims of Hurricane Michael. The IRS offered this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance IR-2018-199; TAXDAY, 2018/10/15, I.5).

Disaster Notice. The IRS granted tax relief to Florida victims of Hurricane Michael, (TAXDAY, 2018/10/15, I.6).

Internal Revenue Bulletin. The IRS released I.R.B. 2018-42 dated October 15, 2018, (TAXDAY, 2018/10/15, I.7).

FEMA Notice. The Federal Emergency Management Agency (FEMA) announced that the president determined that certain areas in Hawaii, Nebraska and South Carolina were eligible for assistance from the federal government, (TAXDAY, 2018/10/15, I.8).

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CCHTaxGroup

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