On Thursday evening May 24, 2018, NSTP’s Director of Education, Paul La Monaca, CPA, MST, attended an invitation only event at The American University in Washington, D.C. The event featured Acting Commissioner Dave Kautter, who also holds the position of Assistant Secretary of Tax Policy. Mr. Kautter addressed a select group of about 50 individuals invited by Professor Don Williamson, American University’s Director of the Master’s in Taxation Program and Executive Director of the Kogod Tax Policy Center. Commissioner Kautter shared his career experiences in tax, from his days with Ernst & Young, serving on Capital Hill and as the former Managing Director of the Kogod Tax Policy Center and Professor at the School of Business. The Commissioner addressed information on the recent passage of The Tax Cuts and Jobs Act and the work that is being done at the Internal Revenue Service as a result of the Legislation. The discussion was moderated by the current Managing Director of the Kogod Tax Policy Center, Caroline Bruckner who also served on Capital Hill. Others in attendance included Capital Hill Staffers involved with the Senate Finance Committee, Dean of the Kogod School of Business, current and former professors of the Kogod School and Alumni … Read More
Revenue Procedure 2018-27 provides relief for taxpayers with family coverage under high deductible health plans (HDHPs) concerning the annual deductible contributions limit for their 2018 health savings accounts (HSAs) under Internal Revenue Code section 223. The maximum for family coverage was originally issued as $6,900 on May 4, 2017. On March 2, 2018, the limit was reduced to $ 6,850 for taxpayers with family coverage under HDHPs pursuant to Tax Reform legislation that changed the calculation for 2018 and future years. This guidance allows taxpayers to continue to treat the 2018 limit as $6,900. It also provides clarifications on how taxpayers who already received a distribution from an HSA of an excess contribution based on the $6,850 deduction limit may treat the distribution as a mistake and repay the HSA without any tax or reporting consequences. It also clarifies how to treat a distribution of an excess contribution (and earnings) based on the $6,850 deduction limit.
In Notice 2018-38, the IRS has provided guidance on the changes made by the Tax Cuts and Jobs Act (TCJA) to corporate Federal Income Tax (FIT) and Alternative Minimum Tax (AMT) rates, and on the application of Code Sec. 15 for corporations with fiscal tax years that include but do not begin on 1/1/2018. A fiscal year corporation with a tax year that includes 1/1/2018 must apply Code Sec. 15(a) to determine the amount of FIT for that tax year. A tentative tax is computed by applying the tax rates prior to the TCJA’s change, and a second tentative tax is computed by using the 21% rate under the TCJA. The total tax for the tax year is the sum of the proportion of each tentative tax amount based on the number of days in the tax year when the different rates were in effect. The AMT for fiscal year corporations is determined similarly.
The IRS has released a fact sheet that highlights new depreciation and expensing rules from the Tax Cuts and Jobs Act (TCJA). Among other things, the maximum Section 179 deduction is increased from $500,000 to $1 million, and the phase-out threshold is increased from $2 million to $2.5 million for property placed in service in tax years beginning after 12/31/17. The definition of Section 179 property is also expanded. The TCJA also increases the bonus depreciation percentage from 50% to 100% for qualified property acquired and placed in service after 9/27/17 and before 1/1/23, however property acquired before 9/28/17 and placed in service before 1/1/18 remains at 50%. The definition of property eligible for bonus depreciation was expanded (notably to include most used property), but certain property is no longer eligible, including property used in providing certain electric, water and gas utilities, or floor-plan financed motor vehicle sales or leasing.
The IRS is testing the Taxpayer Digital Communications (TDC) Secure Messaging program to streamline correspondence audits. The TDC program focuses on audits involving Schedule A Itemized Deductions, the Child Care Credit and the Education Credit, which are processed by the IRS Philadelphia Campus. For approximately 19,000 of these audits, taxpayers and their tax professionals with valid powers of attorney (POA) can communicate with the IRS using secure messaging. This program is by invitation only. If your client is under audit with the Philadelphia Campus and the audit letter says the client can use secure messaging to reply to the IRS, encourage your client to sign up using the website provided in their letter. Once your client registers via IRS Secure Access, you will be able to register under your own SSN and complete the request access verification process. Before you can participate as a tax professional, your power of attorney must be filed on the IRS Centralized Authorization File (CAF) system. After you authenticate and the IRS verifies your power of attorney, you will have access to your own secure messaging mailbox. Additional Information regarding secure messaging and other options is available on IRS.gov at Alternatives to Secure Messaging.
The IRS is providing a new enrolled agent logo that EAs may use in marketing materials. The new logo replaces a logo IRS created in 2012. While use of the new logo is optional, use of the prior logo must cease. The prior logo contains a likeness of a government insignia, which by law limits its use to officers and employees of departments and agencies of the United States. We apologize for this error and any confusion that we may have caused. Enrolled agents have until October 31, 2018 to discontinue use of the logo containing the IRS eagle. The obsolete logo may not appear in any publications, advertising, websites, business cards, or other communications with clients or prospective clients. For further guidance on marketing materials, please refer to Circular 230, particularly § 10.30 regarding Solicitation. Active enrolled agents can obtain the logo by emailing a request to firstname.lastname@example.org with the subject line “EA logo.” An announcement about the logo has been posted to the EA News page on IRS.gov at: https://www.irs.gov/tax-professionals/enrolled-agent-news