SCACPA Podcast 005

SCACPA's Weekly Federal Tax Update

Lynn Nichols Federal Tax Update Podcast

March 5, 2018, edition

Listen as Lynn Nichols provides commentary on 6 Items pertaining to current developments in U.S. tax law. This week’s topics include:

1. Formula-Driven Tax Law Provisions Cause Havoc for Businesses

Businesses are challenging the efficacy and burden of the formulaic approach that taxwriters adopted in structuring several provisions of the Tax Cuts and Jobs Act.

[Tax Notes Today; 2/20/2018; Article by Emily Foster]

2. Second Circuit Upholds New York’s Donor Disclosure Requirement

The Second Circuit, partially affirming a district court, held that a New York state requirement that registered charities disclose donor information doesn’t violate the First Amendment and is not preempted by federal tax law, finding that the requirement doesn’t impermissibly chill speech or act as a prior restraint on donation solicitation.

[Citizens United et al. v. Eric T. Schneiderman; CA 2; No. 16?3310; 2/15/2018 ]

3. No Debt Cancellation Reporting Required for Write-offs

The IRS ruled that a taxpayer is not required to file Forms 1099-C, "Cancellation of Debt," to report discharge of indebtedness because none of the identifiable events listed in reg. section 1.6050P-1(b)(2) occurred.

[Letter Ruling 201807008; 11/14/2017]

4. Interest Expense Deduction Notice Expected in Coming Weeks

The Treasury Department plans to issue a notice in the coming weeks tackling some of the biggest issues with business interest expense deductions under the Tax Cuts and Jobs Act.

[Tax Notes Today; 2/21/2018; Article by Emily Foster]

5. Unadjusted Basis Rule Raises Like-Kind Exchange Questions

The Tax Cuts and Jobs Act has both raised questions about how the newly restricted like-kind exchange provision will interact with the other changes and placed pressure on definitions connected to the new restriction.

[Tax Notes Today; 2/21/2018; Article by Nathan Richman]

6. Gauging the Height of the Specified Service Business Guardrail

Daniel L. Mellor examines the limited guidance available on the key definitional element of the new 20 percent deduction for passthrough income under the Tax Cuts and Jobs Act, specifically, the incorporation of section 1202(e)(3)(A) in defining a “specified service business.”

[Tax Notes Today; 2/21/2018; Article by Daniel L. Mellor, JD, LLM]

7. AICPA Seeks Guidance on Qualified Business Income of Passthroughs

Annette Nellen of the American Institute of CPAs has asked for guidance on the section 199A deduction for qualified business income of passthrough entities, asserting that taxpayers and practitioners need clarity to comply with their 2018 tax obligations and to make informed decisions on tax planning issues.

[Tax Notes Today; Letter from AICPA to Treasury Officials; 2/21/2018

8. IRS Set to Accept Returns Claiming Retroactively Renewed Tax Benefits

The IRS has announced it is ready to process 2017 tax returns claiming three tax benefits that were renewed retroactively under the Bipartisan Budget Act, but taxpayers who filed earlier in the season and want to claim one of the benefits must use an amended return, which can’t be filed electronically and can take up to 16 weeks to process.

[IR-2018-33; 2/22/2018]

9. IRA Distribution Wasn’t Excludable as Transfer Incident to Divorce

The Tax Court held that distributions an individual received from his IRA to make payments to his estranged wife were not excludable from his gross income under section 408(d)(6) as transfers incident to divorce because he did not make a nontaxable transfer of the funds to an IRA in his wife’s name as he was ordered to do by a state court.

[Kirkpatrick, John R; T.C. Memo. 2018-20; 2/22/2018

10. AICPA Offers TCJA Technical Corrections to Taxwriting Committees

In a February 22 letter to Senate Finance Committee and House Ways and Means Committee leaders, the American Institute of CPAs suggested technical corrections for the Tax Cuts and Jobs Act, such as changes to the effective date of the net operating loss provision, to the property class life of qualified improvement property, and to the charitable deduction limitation.

[Tax Notes Today; AICPA letter; 2/22/2018]