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David Kautter Announces that Guidance on the Section 199A Pass-through Deduction will be Released in Weeks

On July 17, 2018, David Kautter, the acting Commissioner of the Internal Revenue Service (“IRS”), announced that the Treasury Department is currently reviewing guidance under section 199A and anticipates the guidance to be released within weeks. Kautter further stated that the IRS is treating the section 199A deduction, the section 59A base erosion and anti-abuse tax (“BEAT”), and the...

Brady Announces that the Outline of Phase 2 of Tax Reform will be Released Next Week

Kevin Brady, Chairman of the House Ways and Means Committee, announced on July 18, 2018 that an outline of the “phase 2” tax reform legislation will be released during the week of July 23rd. Brady also stated that the phase 2 legislation will not include any technical corrections or refinements to the 2017 tax act and that the focus of the legislation will be to make permanent the...

The Office of Management and Budget Received Draft Transition Tax Regulations

On July 13, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) acknowledged receipt on its website of proposed rules under section 965.  The rules are currently under review, but OIRA has indicated that they are not economically significant, and therefore the normal 45-day review timeline (subject to extension) applies. Read more: Transition Tax...

Vote on Technical Corrections Bill Not Expected Until After Midterm Elections

While House Republicans are in the process of drafting a technical corrections bill, House Republican leaders do not expect vote a on the bill until after the midterm elections in November. The technical corrections bill would be separate from the “phase 2” tax legislation that would make the individual tax cuts implemented by the 2017 tax act permanent. Kevin Brady, chairman of the...

European Commission Discussing Implementation of the TCJA with U.S. Officials

According to Valdis Dombrovskis, a European Commissioner, the European Commission is speaking with U.S. officials about the Commission’s concerns with the 2017 tax act. European finance ministers have claimed that some provisions of the act violate international norms and double taxation treaties, especially the Base Erosion and Anti-Abuse Tax (or BEAT), which some commentators claim...

The White House Office of Management and Budget Has Not Yet Reviewed any New Tax Law Rules

Based on a new arrangement between the White House Office of Management and Budget (OMB) and Treasury, regulations and other guidance that have policy or economic significance will undergo a compliance review by the OMB. A senior administration official recently stated that Treasury and IRS have not yet sent any new tax regulations or guidance to the OMB for review, despite officials...

Legislative Changes to the International TCJA Provisions to Be Considered

In a recent interview, Kevin Brady, chairman of the House Ways and Means Committee, stated that legislative changes to the international provisions of the TJCA are in the works and that these changes may be included in the legislation associated with phase 2 of tax reform, which Brady indicated would be reviewed by House Republicans in July. President Trump has also weighed in on the...

Phase Two of Tax Reform Will Retain Pretax Benefits of 401(k) Plans

A spokesperson from the House Ways and Means Committee recently stated that the new tax proposals will not revise the pretax treatment of 401(k) savings plans. House Ways and Means Committee Chairman Brady previously stated, in an interview, that the phase 2 tax proposal might address retirement and include a savings element. Read More: Ways & Means Quashes Rothification Concerns...

Proposed Regulations and Guidance on Sections 199A and 163(j) Will Draw on Existing Regulations

The IRS is incorporating relevant existing regulations in drafting the proposed regulations for sections 199A and guidance for section 163(j). However, as noted by Holly Porter, acting IRS associate chief counsel, there are limitations to the degree to which application of these two sections can rely on regulations already existing under other sections due to the differences in nature...

Proposed Regulations Related to Previously Taxed Income (PTI) Are Expected This Year

Marjorie Rollinson, IRS Associate Chief Counsel International, has indicated that issuing new proposed PTI regulations is a priority for the IRS this year. The new PTI regulations would address issues related to the global intangible low-taxed income (GILTI) and deemed repatriation provisions of the Tax Cuts and Jobs Act, specifically, how to allocate deductions against tested income...

Markup for Legislation for Phase 2 of Tax Reform Is Expected After August

House Ways and Means Committee Chair Kevin Brady indicated that a new tax bill may be marked up after the August recess, a date later than his previous estimate. Brady also noted that parts of the phase 2 legislation may be pulled from previous Senate and House proposals. Read More: Phase 2 Markup Likely Delayed Until After August...

Congress Unlikely to Act on Technical Corrections until after November Elections

Congress appears unlikely to pass a technical corrections bill for the Tax Cuts and Jobs Act prior to the November elections. Senate Majority Whip John Cornyn stated that the corrections are not imminent, and as an indication of further delay, Kevin Brady, Chair of the House Ways and Means Committee, has stated that any technical corrections will be affected by the guidance released by...

House Budget Would Extend Individual TJCA Provisions

On June 19, 2018, the House Budget Committee released a 10-year budget plan that, if passed, would provide a vehicle to extend the individual tax provisions enacted under the TJCA past their current expiration date in 2025 through the budget reconciliation process. To help reduce the cost of extending the cuts, the budget plan requires committees to submit legislation to reduce the...

Legislation for Phase 2 of Tax Reform Expected in August

House Ways and Means Committee Chair Kevin Brady indicated that Republicans hope to have a proposal for healthcare and additional tax changes by August. While the contents of the bill remain uncertain, potential topics include: permanent individual income tax provisions, retirement savings, the treatment of capital gains, and employer incentives for helping to pay back student loan...

The IRS Releases Additional Guidance on Penalties Related to the Transition Tax

The IRS announced that it will waive the estimated tax penalty for taxpayers subject to the transition tax under section 965 in certain instances, such as (1) for any taxpayer that improperly applied a 2017 overpayment to a 2018 estimated tax liability, and (2) for any individual that missed the April 18, 2018 deadline for making the first payment. Read more: IRS offers penalty, filing...


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