Treasury and IRS Guidance will not Address Qualified Improvement Property
During an ABA Tax Section meeting in Atlanta on October 5, 2018, officials from the Treasury Department and the IRS announced that they will not be able to provide an administrative fix for the drafting error in the qualified improvement property provision of section 168(k). Rather, the officials stated that Congress must make a technical correction, as the agencies do not have authority to administratively amend the “clear language in the statute.” Section 168(k) was amended by the Tax Cuts and Jobs Act and was intended to allow qualified improvement property to qualify for full expensing and otherwise be depreciated over 15 years; however, a drafting error caused the property to be depreciated over 39-years and thus be ineligible for full expensing.
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