Transitional Guidance on Fines and Penalties Issued by IRS

Last week, the IRS issued Notice 2018-23 to assist government officials and taxpayers with complying with Sections 162(f) and 6050X of the Internal Revenue Code. The Tax Cuts and Jobs Act revised Section 162(f), which disallows deductions for fines and penalties, defined to exclude amounts paid as restitution or as reimbursement for investigations, or paid in suits where there is no government party involved. Notice 2018-23 provides details on how to satisfy the requirements for these exceptions. Additionally, the notice addresses the effective date of Section 6050X, a new section of the Code that imposes reporting requirements for Section 162(f) amounts over $600. Finally, comments are requested to guide the Treasury and the IRS in forming future proposed regulations for the sections.

Read the Notice Here
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